As part of an Austerity Law passed by the Mexican legislature in May, commerce officials in Mexico recently ordered the closure of six foreign commercial trade offices, including customs offices in Belgium, Canada, China, France, Japan and Uruguay.
The order was recently signed by the head of Mexico's Ministry of Economy (SE), Graciela Márquez Colín, as well as by Mexico's Undersecretary of Foreign Trade, Luz María de la Mora Sánchez. The six offices are to be closed no later than October 31.
The Mexican government will only keep two foreign trade offices open – in Geneva, Switzerland, and Washington, D.C.
The new austerity law was pushed by Mexican President Andrés Manuel López Obrador in order to generate savings to fund programs for Mexico's poor.
Trade analysts in Mexico said the closing of foreign trade offices goes against making the country a global trading partner.
"I think closing the international offices of Mexico's Trade Minitry is very unfortunate," international trade analyst Kenneth Smith-Ramos told FreightWaves.
"These offices provide essential trade intelligence that is useful for the negotiations that Mexico conducts, and they also play a vital role in defending the interests of Mexico's exporters," Ramos said.
Ramos worked for the Mexican government on Mexico's North American Free Trade Agreement (NAFTA) negotiating team back in the 1990s, as well as a trade negotiator for former Mexican President Enrique Peña Nieto, who left office in 2018. Ramos now works an international trade consultant at Mexico City-based AGON.
"The small savings that will accrue the Mexican governmnt from closing these offices will be largely surpassed by the costs of not having an official presence of technical trade officials in key markets for Mexico such as Canada, Japan, the European Union and South America," Ramos said.
Enoch Castellanos Férez, president of Mexico's National Chamber for Industrial Transformation, (CANACINTRA), said that closing the foreign trade offices goes against the diversification of foreign trade, which was one of the main reasons to ratify the United States-Mexico-Canada Agreement.
CANACINTRA is Mexico's national chamber of commerce organization, promoting trade and business domestically and abroad.
"Precisely those offices, together with ProMéxico, sought to diversify Mexico's exports and not depend so much on trade with the United States," Férez said in an interview with La Jornada.
ProMéxico is a public fund overseen by Mexico's Ministry of Economy that promotes international trade and investment.
In addition to closing the foreign trade offices, the Mexican government has also been closing trade and customs offices throughout cities in Mexico in recent months.
The closure of customs offices in the Mexican state of Tamaulipas has customs officials worried about the effect on cross-border trade.
In the state of Tamaulipas, around 400 import/export companies are having problems with Latin American Integration Association (ALADI) certificates due to the closure of customs offices, officials said.
"There are companies that import from Latin America that are struggling with certificates because of the closing of economic offices in different parts of the country and obviously the state," said Carlos Garcia, director of economic development for Tamaulipas in an interview with Posta.
ALADI was established in 1980, and includes the governments of Argentina, Brazil, Mexico, Paraguay and Uruguay. ALADI certificates are required to move goods between those countries.
"We are in communication with people from the economy asking that the five delegations that we have in Tamaulipas remain open. Until now they have confirmed that only Nuevo Laredo will remain, but if you have to do a procedure in Tampico, Madero, Altamira or Madero you have to go to Nuevo Laredo," Garcia said.
Nuevo Laredo lies directly across the U.S.-Mexico border from Laredo, Texas, which is one of the biggest ports in the country.
Image Sourced from Pixabay
See more from Benzinga
- Criminal Charges Filed Against Wallenius Wilhelmsen
- What The Truck?!? LIVE From McLeod's UC2019 In Aurora, CO Day 2
- FreightWaves NOW: IMO 2020 And Oil Prices
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.