By Anthony Esposito and Sharay Angulo
MEXICO CITY (Reuters) – U.S. business lobbies are pressuring Mexico’s government to label certain industries “essential” so that strict health emergency measures aimed at containing the spread of the coronavirus in Mexico do not halt key operations on both sides of the border.
Bound by a 26-year-old trade agreement, value chains and productions lines in Mexico and the United States are intricately intertwined and countless parts travel back and forth across the border.
“Essential activities in the United States are still operating, still producing and it’s important that this is standardized for American companies in Mexico so as to not break the value chains,” said Luis Foncerrada, chief economist at the American Chamber of Commerce (AmCham) in Mexico.
Late last month, Mexico declared a health emergency and issued stricter rules to contain the coronavirus outbreak, including extending the suspension of non-essential activities.
“We’re talking with (Mexican) authorities to explain and argue for the enormous importance of standardization approval … because if not, many production lines and value chains will be interrupted,” Foncerrada said.
AmCham is leading the talks and is in close contact with the U.S. Embassy in Mexico and trade offices in Washington.
“They’re aware and perfectly informed,” Foncerrada said.
The Motor & Equipment Manufacturers Association (MEMA), a lobby for U.S. auto parts suppliers, sent a letter to U.S. Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer expressing their “grave” concern about the “negative economic impact” the Mexican restrictions pose.
MEMA argues that production of car parts was not deemed an essential business activity in Mexico and there is no clear process for companies to address potential exclusions.
“Mexico’s action illuminates the need to hold three-party discussions, U.S., Canada, and Mexico, on how the North American motor vehicle and parts manufacturing industry will return to normal operations safely and effectively,” MEMA’s letter said.
Meanwhile, Mexico’s powerful CCE business lobby has asked the government to clear up which companies can, and which cannot, continue operating.
Jonas Murillo, head of Mexico’s canned food chamber, said that while food production is considered an essential activity and those operations continue full steam ahead, there is concern about being able to produce cans to package that food.
“We’re taking the risk and continuing to produce and if they come and tell us to stop, our understanding is we’re part of the agro-food chain … It’d be easier if they had a list clearing up who can and can’t,” Murillo said.
(Reporting by Anthony Esposito and Sharay Angulo; Additional reporting by David Shepardson in Washington; Editing by Leslie Adler)
