02 Jul Trade and Effect

We expect Trump not to renew the USMCA tomorrow, and this will have significant impacts on Cameron County and the surrounding Lower Rio Grande, an area dependent on massive trade volumes between the US and Mexico.

The USMCA or United States, Mexico and Canada Agreement currently dictates the terms of free trade between the three countries, officially replacing NAFTA in 2020.

According to Reuters, not renewing the agreement will lead to a phasing out of it over 10 years. We’d essentially be signaling the end of free trade that has existed between the US and Mexico since Clinton signed NAFTA.

President Trump has had plenty of reversals and extensions in negotiations with other countries so we’ll be on the lookout for if these stick. However, it is important to mention that ending this agreement would be in line with his general trade policy.

Cameron County’s economy is anchored by US / Mexico trade. An estimated $69 billion dollars flows through Hidalgo and Cameron County ports of entry every year. For comparison, Guatemala’s total trade (exports + imports) is roughly equal to $48bn.

And while trade will continue to flow through the region (the ports near the Matamoros / Brownsville area have been casting off commercial ships since the 1500s), the terms of trade will impact what and how much.