The IX Summit of North American Leaders with AMLO, Joe Biden and Justin Trudeau was carried out, but what do your agreements represent for the industry?
The North American Leaders Summit (also known as the Three Friends Summit), was held for the first time in 2005 in order to reaffirm the ties between Mexico, Canada and the United States to make North America “the most competitive region. and dynamics of the world ”(according to a statement from The White House); However, they stopped meeting when President Donald Trump came to office in 2017, but after a few years and with some updates between the presidents, they meet again to discuss new agreements.
This November 18, the IX North American Leaders Summit was held in Washington DC, representing the first time that the president of Mexico AMLO met together with Prime Minister of Canada Justin Trudeau and Joe Biden, the current president of the United States, in order to work together to cover various points that would raise the industry of the three North American countries, among them, achieve regional growth and compete with other entities in the world that are position as leaders, mainly that of China.
Today, I hosted Canadian Prime Minister Justin Trudeau and Mexican President Andrés Manuel López Obrador for a North American Leaders’ Summit. We’re committed to providing a better future for our people and creating the conditions for prosperity, sustainability, and security. pic.twitter.com/JsfUkvMVVJ
– President Biden (@POTUS) November 19, 2021
During the meeting, AMLO, showed some data in which he points out that the union between Canada, Mexico and the United States currently represent 13 percent of the market world, while China registers 14.4 percent, showing a significant imbalance.
“And this unevenness comes from 30 years ago, since in 1990 China’s participation was 1.7 percent and that of North America was 16 percent. If the trend continues, by 2051, China would dominate 42% of the world market and we would have 12%, which, in addition to being a disproportion, would keep alive the temptation to bet on solving that disparity with the use of force, which would put us all in danger, ”added López Obrador.
Considering that this would be the first time that AMLO, Trudeau and Biden join forces, being two of them “new” in the position, this would mean a new opportunity to growth for industry with the arrival of new alliances, strategies and investments in the future. On this occasion they have been concerned about the situation of the current economy, Covid-19 and the rights of workers.
Likewise, they showed the relevance of the ratification of the Free Trade Agreement between Mexico, the United States and Canada (T-MEC):
“It has been a wise decision for the good of our peoples and nations. (…) It is a valuable instrument to consolidate our production processes, taking advantage of the great potential that the domestic market represents, which will allow us to develop like no other region in the world ”, AMLO mentioned.
Given this, Joe Biden affirmed that North America has sufficient capacity to face adversity and boost the economy, currently having as its main objective to eradicate the damage caused by Covid-19, plans that Justin Trudeau has confirmed:
“We are going to take decisive action to reduce climate change, for economic recovery, and for the challenges of migration,” said Biden.
“Our priority is to end Covid-19, economic recovery and strengthen supply chains. This is going to be backed by an agreement that will put workers’ rights first, ”added Trudeau.
These agreements would positively impact the different industries, through organized teamwork and the concern of the three nations to promote development and economic growth, seeking to surpass China. AMLO mentions that one of the actions with which they would achieve this feat would be to promote a productive investment program to substitute imports and grow with the help of the three nations, instead of depending on other countries, in addition to contributing to an efficient flow migratory.
At the IX North American Leaders Summit, we proposed jointly planning regional development and promoting a productive investment program to substitute imports. We propose to analyze the demand for labor and thus open the migratory flow in an orderly fashion. pic.twitter.com/e2za69mCQK
– Andrés Manuel (@lopezobrador_) November 19, 2021
Despite the efforts shown on this occasion with AMLO, Trudeau and Biden to improve the economy of the three countries, the Automotive industry the United States may not focus on obtaining the same results compared to other areas.
According to the site of 24 hours, Mexico and Canada have previously accused Joe Biden of protecting the development of electric cars, since during a visit in Detroit to General Motors, Joe Biden would have mentioned that “The future is electric and it will be made here, in the United States”: also , would have promoted the plan of social and environmental measures of 1.75 billion dollars that would be being negotiated in Congress, including a tax credit to promote the purchase of American vehicles “made in the USA”.
This $ 12,500 credit to vehicles electrical, would include the tax deduction of up to $ 7,500 plus a tax credit of 4,500 if the vehicle was manufactured by workers who are members or represented by a union in the United States, an action which, according to Flavio Volpe, president of the Federation of Auto Parts Manufacturers of Canada (APMA), these proposed financial incentives would represent “a greater threat than anything that Donald Trump has imposed on us”, since this would be taken as an unacceptable and illegal protectionist measure in light of the free trade agreement between the countries involved.
Canadian Commerce Minister Mary Ng previously warned Katherine Tai in a letter to Congress on October 22 that this measure could affect the functioning of the American automotive industry, mentioning that:
“If adopted, these tax credits would have a major negative impact on the future of auto and electric vehicle production in Canada, which carries the risk of serious financial damage and tens of thousands of job losses.”
Despite the efforts to boost the industry, AMLO, Biden and Trudeau could find themselves in some complications and should continue working together to carry out the necessary strategies and reach an agreement to boost the economy of the three North American countries.