Provisions of USMCA
Implications for Mexico of China's admission to CPTPP


On 16 September 2021, China's Trade Ministry formally filed an admission request to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This article explores the repercussions on Mexico's trade relationships under the United States, Mexico and Canada Agreement (USMCA) if China were to join the CPTPP.

Provisions of USMCA

The USMCA establishes that when any party wishes to execute a free trade agreement (FTA) with a non-market country, such party must notify the other parties for them to review and analyze such FTA.

If a party joins the FTA with a non-market country, this will allow the other parties to terminate the USMCA on a six months' notice, in accordance with article 32.10, section 5, of the USMC. The provision reads as follows:

Article 32.10: Non-Market Country FTA

. . . .

5. Entry by a Party into a free trade agreement with a non-market country will allow the other Parties to terminate this Agreement on six months' notice (…)

Implications for Mexico of China's admission to CPTPP

If China were admitted to the CPTPP, Mexico would be entering into an FTA with a non-market country, which would allow the United States to terminate the USMCA.

If the USMCA were terminated, Mexico would suffer a huge economic downfall, since the United States is its first commercial partner, and the trade operations between Mexico and the United States represent an important percentage of their economies.

Figure 1 shows the percentage of the exports made by Mexico to its principal trade partners.

Figure 1: percentage of exports made by Mexico to its principal trade partners

For further information on this topic please contact Edmundo Elías-Fernández, Daniel Torres-Güémez or Daniel Ascencio-Zamarripa at Ramos, Ripoll & Schuster ​by telephone (+52 55 1518 0445) or email ([email protected], [email protected] or [email protected]). The Ramos, Ripoll & Schuster website can be accessed at www.rrs.com.mx.