One of the best things about the USMCA update to NAFTA is its consideration of how to bring more small businesses into the fold of international trade agreements. This is critical!
Among the ways it does so, one is pretty common-sense. The US, Canada and Mexico are required to make information on tariffs and regulatory updates more accessible. You shouldn’t need a lawyer in-house to sell to your customers next door. Here’re Mexico’s portals on exporting for SMEs and USMCA (called T-MEC by Mexico). They’ve actually had another portal, SIAVI, for a long time, where you can get information on tariffs, and here is SNICE, yet another data portal they’ve added.
Another important factor is the USMCA providing more certainty in the digital landscape of international sales. While Mexico took this opportunity to clarify that yes, digital services are in fact liable for VAT, that was going to happen eventually, and we’re glad for the stability they’ve provided in finally pulling the trigger on that. And, we’re glad USMCA is there to help ensure Mexico’s levying mechanisms make sense for US and Canadian (and Mexican!) companies.
One other feature we’re particularly happy about, as a Mexico-based company ourselves, is the labor mechanisms that should help Mexico continue to lay the framework for employees here to be ensured sensible protections, incentive for professionalization and improved productivity, and ultimately, ahem, be paid more. Labor market arbitrage, contrary to many long-held practicies, is not great for trade in the long run especially among neighboring markets. This continues a pattern long underway in Mexico, notably seen in “formalization” efforts for getting small businesses into the financial system.
We’ll go into more detail on specific opportunities next week, March 9, when we present at the USMCA Workshop Series webinar on Mexico and Canada opportunities. Thanks to the US Commercial Service in Virginia, Virginia’s Small Business Development Center, and the Virginia Economic Development Partnership for inviting us to participate!