Mexico, like other countries, invested in measures to attract foreign direct investment. It therefore signed the USCM Agreement in 1994, a treaty that imposed Mexico as the largest direct exporter to the United States, a country that is likely to leave the treaty by renegotiating USMC. Therefore, this research is carried out to determine the advantages and disadvantages of renegotiation based on Sinaloa's agricultural exports, with the question of whether it would negatively affect Sinaloa's agricultural exports.
TopIntroduction
In Eduardo Galeano's book “The Open Veins of Latin America” he stipulates the phrase: “The people who buy rule, the people who sell served; trade must be balanced to ensure freedom; the people who want to die sell to only one people, and the people who want to save sell to more than one” (Galeano, 1970).
The regional agreement called the Mexico, North American Free Trade Agreement (NAFTA) was signed between the governments of Mexico, Canada and the United States in 1992 and entered into force in 1994, aiming to create a free trade area, at a reduced cost for the exchange of goods between the three countries. Since 1994, it is one of the largest free trade zones in the world, establishing the basis for strong economic growth and greater prosperity for Canada, the United States, and Mexico.
For 15 years, the NAFTA has demonstrated how free trade contributes to increased wealth and competitiveness by providing true benefits to families, farmers, workers, manufacturers and consumers (NAFTA de hoy, 2017).
The NAFTA or United States, Canada and Mexico Agreement (TMEC) is the set of rules that Mexico, the United States and Canada agree to sell and buy products and services (Castro, 2008). It was an innovative treaty aimed at opening and expanding the North American market. Since then, the NAFTA has systematically removed most of the tariff and non-tariff barriers to trade and investment between Canada, the United States and Mexico, leading to the establishment of a stable framework for long-term investments.
The TMEC was preceded by the Canada-United States Free Trade Agreement (Expansion, 2017). President Donald Trump was in a renegotiation crisis due to the entry into power of the government of the United States, who proposed to rearrange the rules established in the treaty with faithful benefits in his favor and if not, he announced the departure of his country from the agreement. The renegotiation has already been finalized, but there is in Mexico a wave of uncertainty about what would happen to its exports, since it is the main supplier of raw materials and a variety of merchandise to the United States.
Currently, a series of changes have emerged in the decisions of the governments involved in the TMEC, mainly the United States. Therefore, it is of utmost importance to conduct a viable investigation about the impact of the renegotiation on Sinaloa exports, since the state Sinaloa has earned the nickname of being the breadbasket of Mexico for the large amount of raw materials that the state produces. It is the number one state in supplying its agricultural products to the neighboring country (United States). That is why the present project is delimited in a spatial way to firmly base ourselves on determining the advantages and disadvantages that, by the renegotiation of the TMEC, were implemented in Sinaloans agricultural exports.
Therefore, it is of utmost importance to investigate and determine the impact of the renegotiation of the TMEC on Sinaloan agricultural exports, a state called “the granary of Mexico” for its wealth in agricultural crops and which has earned the first place of exploitation of these raw materials to be exported to the neighboring country, the United States.
That is why this research work is aimed at determining the advantages and disadvantages in production, trade and distribution network that will prevail after the renegotiation. Taking as indicators Mexico's exports and trade, the gross domestic product (GDP), GDP per capita, and transportation logistics for export shipments, this chapter intends to:
- 1.
Analyze the renegotiation of the TMEC;
- 2.
Determine the advantages of Sinaloan exports;
- 3.
Determine the disadvantages of Sinaloan exports;
- 4.
Analyze the production of agriculture in Sinaloa;
- 5.
Analyze Sinaloa's trade in relation to the USA.
Some of the questions that this study tries to answer are:
- 1.
Will the renegotiation of the TMEC negatively impact Sinaloa agricultural exports?
- 2.
What would be the production in Sinaloa's agricultural exports based on the renegotiation of the TMEC?
- 3.
How would trade in agricultural exports in Sinaloa be based on the renegotiation advantages of the TMEC?
- 4.
What would the distribution network in Sinaloa's agricultural exports look like depending on the disadvantages of renegotiating the TMEC?