Trade Slowdown Expected This Year
The trade is expected to slow down this year’s end, with a challenging January ahead. It is crucial to have legal certainty through public policies that lay the groundwork for investment and facilitate a viable review of the T-MEC with the United States and Canada.
Why is the economy slowing down this year?
One of the indicators is the behavior of the heavy vehicle industry, which moves more than 70% of national products. With a 51% contraction in this sector, the slowdown is evident.
Impact of this slowdown
The impact is on both domestic and international markets. Exporting heavy vehicles, mainly destined for the United States, dropped 29.8% during the first nine months of the year compared to the same period in 2024. This translates to less demand, reduced productivity, and the need for product mobility.
The “waste” vehicles issue
However, the decline in the economy might not be as severe if we consider the market of “waste” trucks, buses, and tractors older than 16 years, entering via export without mechanical reviews, unknown engine conditions, and not meeting current emission standards.
These older vehicles also move local goods and production, though to a lesser extent than units under 10 years due to their outdated structure. The main concerns with these “waste” vehicles are tax revenue, pollution, and road safety.
Conamer’s Proposal for Environmental Update
Recently, Conamer, led by Alberto Montoya, along with ANPACT under Rogelio Arzate’s presidency, proposed updating the environmental agreement. The goal is to ensure all vehicles operating nationally are no more than 10 years old.
This would affect at least 800,000 registered units over 16 years old and another 800,000 units with unclear registration but operating with state permits.
Viability of the Reviewed T-MEC Agreement
The agreement under review at Semarnat, directed by Alicia Bárcena, and the Secretariat of Economy, led by Marcelo Ebrard, may or may not halt heavy vehicle exports and entries. It depends on how the agreement is presented, whether it includes penalties for non-compliance.
A potential solution not yet considered is requiring all heavy vehicles entering Mexico to have an origin certificate, which also necessitates technological advancement, as demanded by the United States.
Key Questions and Answers
- Why is the trade expected to slow down this year? The heavy vehicle industry’s 51% contraction is a significant indicator of the economic slowdown.
- What is the impact of this slowdown? Exporting heavy vehicles to the US dropped 29.8%, affecting demand, productivity, and product mobility.
- What is the “waste” vehicles issue? Older vehicles, lacking proper reviews and meeting current standards, still move goods but pose concerns about tax revenue, pollution, and road safety.
- What is Conamer’s proposal? Conamer proposed updating the environmental agreement to limit vehicle age to 10 years, affecting around 1.6 million units.
- Is the reviewed T-MEC agreement viable? Its viability depends on the presented terms, including potential penalties for non-compliance.
