The Consejo Coordinador Empresarial, a prominent employers' group that contributes significantly to Mexico's economy, accounting for 80% of the country's GDP, has appointed Judith Garza Rangel, an executive from the Italian-Argentinian steel giant Ternium, as the coordinator for a team of 34 working committees. This team is tasked with supporting the Mexican government in the upcoming 2026 review of the United States-Mexico-Canada Agreement, a crucial trade agreement for the three North American nations.
Since the negotiations surrounding the North American Free Trade Agreement in the 1990s, the private business sector in Mexico has advocated for a mechanism known as "Cuarto de Junto" or "Task Force." This initiative aims to provide organized support for the negotiation of international trade agreements, ensuring that the interests of the business community are represented effectively. Under Garza Rangel's leadership, the team has been collaborating with the Ministry of Economy for the past six months, focusing on the critical review of the USMCA.
The working committees that Garza Rangel oversees consist of more than 300 business organizations spanning the entire national productive sector. This extensive network reflects the importance of collective input from various industries, particularly as the USMCA represents the primary market for Mexican trade. In 2023, the United States and Canada accounted for a staggering 88.8% of Mexico's total trade flow, which reached $905 billion.
Ternium's involvement in this "Task Force" is particularly significant given Mexico's historical challenges within the steel industry. For at least the past three decades, Mexico has faced a persistent deficit in steel production. Recently, Ternium's CEO, Máximo Vedoya, projected that Mexico's steel deficit with the United States for the current year would reach 2.3 million metric tons. This figure includes 2.1 million metric tons of exports and 4.4 million metric tons of imports, highlighting the ongoing imbalance in trade.
Mexico's steel deficit with the United States is expected to rise by 30.5%, increasing from 1.76 million metric tons in 2023 to 2.3 million metric tons in 2024. This alarming trend indicates a significant escalation in the trade deficit, particularly when compared to the previous year's figures. The deficit for 2022 was recorded at 469,000 metric tons, representing an explosive increase of 390.6% year-over-year.
The implications of these statistics are profound, as they underscore the challenges faced by the Mexican steel industry and the need for strategic interventions. The appointment of Garza Rangel and the formation of the working committees signal a proactive approach to addressing these issues. The collaboration between the private sector and the government is essential for crafting policies that can enhance domestic steel production and reduce reliance on imports.
As the review of the USMCA approaches, the focus will be on fostering stronger trade relations and addressing the structural deficiencies within Mexico's steel sector. The insights and expertise brought by Ternium and other stakeholders in the "Task Force" will be vital in shaping a comprehensive strategy that not only addresses the current trade deficit but also positions Mexico as a more competitive player in the global steel market.
