USA and Mexico signed a trade agreement to replace NAFTA

Talks to renegotiate NAFTA represent a real opportunity for Technology Industry

28 de agosto del 2018


Negotiations with Canada will begin immediately to reach a final agreement on Friday, August 31 as announced by the US Government.

The United States and Mexico have reached this agreement for the North American Free Trade Agreement (NAFTA), while negotiations with Canada begin immediately to reach a final agreement on Friday, as announced by the US government.

Yet while President Trump may try to change the name, the agreement reached with Mexico is simply a revised Nafta, with updates to provisions surrounding the digital economy, automobiles, agriculture and labor unions.

President Enrique Peña Nieto spoke recently with the Canadian Prime Minister, Justin Trudeau, to highlight the "importance of his reincorporation to the process" of NAFTA negotiation, before the announcement of an agreement between the Latin American country and the United States.

Mexican officials said on Monday, August 27 that they wanted to have Canada back in the process and were working toward a trilateral deal by the end of the week. The Mexican President, Enrique Peña, who joined the White House announcement via phone, said, “It is our wish, Mr. President, that now Canada will also be able to be incorporated in all this.”

Under the changes agreed to by Mexico and the United States, car companies would be required to manufacture at least 75 percent of an automobile’s value in North America under the new rules, up from 62.5 percent, to qualify for Nafta’s zero tariffs. They will also be required to use more local steel, aluminum and auto parts, and have 40 to 45 percent of the cars made by workers earning at least $16 an hour, a boon to both the United States and Canada and a win for labor unions, which have been among Nafta’s biggest critics.

The countries also agreed to limit the kinds of legal challenges that investors can make against foreign governments under Nafta. The oil and gas, infrastructure, energy generation and telecom industries are exempted from these more restrictive rules.

The Mexican telecommunications and information technology sector will be greatly benefited by the signing of the free trade agreement with the United States, since many issues related to technological progress were not contemplated in the previous document. the Mexican ambassador to the Organization for Economic Cooperation and Development (OECD), Mónica Aspe, and the Undersecretary of Communications, Edgar Olvera agreed.

There are several ways the technology sector could be affected: from changes related to taxes for online shopping in Mexico from U.S. retailer, to the prospect of relaxing data sovereignty requirements by the federal government, and many different other things.

Talks to renegotiate Nafta represent a real opportunity for the technology sector. Indeed, the date on which the agreement was signed in its early days (1994), the technology was not really developed and certainly not at the level of development reached today. It is therefore an opportunity for this sector to come forward and to be considered as a priority of the points to be negotiated. Technology must be an integral part of such an agreement given the place it occupies today in all sectors of activity and in the lives of all the world’s citizens.

The goal should be to update the pact to include technology and consider digital services and intellectual property. Digital technology should receive a featured place, if not top of the list. Hopefully, the three countries will move in the same direction on this point, towards modernity and progress. This is certainly possible because they are all in favor of modernizing this tripartite agreement.


In addition, tech industry should take advantage of this opportunity as this agreement has already benefited many sectors. This represents a big opportunity to be able to do business with Mexico and we will be glad to help you with that. Contact us