Background on Kenneth Smith Ramos
Kenneth Smith Ramos is a former chief negotiator for Mexico in the trade agreement with the United States and Canada, known as the T-MEC. His expertise in international trade makes his opinion on the matter highly relevant as Mexico prepares for the upcoming review of the T-MEC.
Current Situation and Risks
Smith Ramos highlighted that the probability of T-MEC dissolution is “very low,” less than 5%. However, he emphasized that pressure on tariffs would persist in other sectors during Donald Trump’s administration. Existing tariffs on Mexican imports of autos, steel, aluminum, and copper are likely to continue. Additionally, the United States might impose non-tariff barriers and maintain tariff risks due to nine individual national security investigations in key export and production sectors, such as heavy-duty trucks, lumber, aerospace, semiconductors, pharmaceuticals, and aircraft turbines.
US Negotiation Focus
Smith Ramos anticipates that the United States will request certain changes to emphasize their concerns about China. He believes that while the likelihood of the US exiting the agreement is minimal, negotiations will extend beyond July 1, 2026. The extent of this extension depends on what the Washington government presents in January, providing insight into whether a review or renegotiation will occur.
Recommendation for Mexico
Given the current scenario, Smith Ramos recommends that Mexico’s federal budget be increased to boost human resources by at least 50%. Although there is a “very solid” and “robust” negotiation team led by Luis Rosendo Gutiérrez in the Secretaría de Economía (SE), more resources are needed for the upcoming task. The number of negotiators has been cut in half since the start of Andrés Manuel López Obrador’s administration.
Smith Ramos suggested expanding the SE’s negotiation capacity and providing more positions for other international areas involved in these matters, such as the Secretaría del Trabajo and the Secretaría de Hacienda.
Importance of Collaboration
Smith Ramos stressed the importance of collaboration between the private sector and the government for successful negotiation. If Mexico strengthens the T-MEC while Donald Trump continues to dispute with Europe, Mexico’s attractiveness as a trade partner would increase.
Key Questions and Answers
- What is the likelihood of T-MEC dissolution? According to Kenneth Smith Ramos, the probability is “very low,” less than 5%.
- What tariff-related risks persist under Donald Trump’s administration? Tariffs on Mexican imports of autos, steel, aluminum, and copper are likely to continue. Additionally, the US might impose non-tariff barriers and maintain tariff risks due to nine individual national security investigations in key sectors.
- What changes does Smith Ramos anticipate from the US in T-MEC negotiations? The United States is expected to request changes emphasizing their concerns about China.
- How should Mexico prepare for T-MEC review negotiations? Smith Ramos recommends increasing the federal budget to boost human resources by at least 50% and expanding negotiation capacity in relevant areas.
- Why is collaboration between the private sector and government crucial? Collaboration ensures a successful negotiation process, making Mexico more attractive as a trade partner if the US continues to dispute with Europe.
