US-Mexico relations expert, Hiroshi Takahashi warns that changing Mexico's Outsourcing law will endanger American companies

MEXICO CITY, Jan. 26, 2021 /PRNewswire/ -- American businesses in Mexico face a challenging future ahead if the amendment proposal to reform the current outsourcing scheme in the country is passed, according to Hiroshi Takahashi, Editorial Director of El Sol de México and an expert in Mexico-US economic relations.

In an essay published this week in El Sol de México, Mexico City's leading newspaper, Takahashi states that the outsourcing scheme reform will jeopardise Mexico's special relationship with the United States and put in danger more than seven million jobs.

El Sol de México the Organización Editorial Mexicana, a chain that publishes over 30 newspapers and several million copies a day. Takahashi serves as its editor since August 2017.

The analyst, who has written for media outlets such as Forbes, El Heraldo de México, Diario 24 Horas and La Silla Rota, mentions that the reform will violate the labour clauses of the United States–Mexico–Canada Agreement, add legal uncertainty and reduce Mexico's position in the region.

"The approval of the outsourcing law will make it so difficult for large U.S. companies to operate in our country that it will surely cost us jobs and have repercussions for our relationship with the new Biden administration", Takahashi wrote in his essay.

According to Takahashi, among the companies affected by the law reform are Amazon, American Express, Coca-Cola, Costco, DHL, Pepsico, Exxon, FedEx, Ford, General Electric, General Motors, Philips, Chrysler, Honeywell, and Intel.

In his analysis, the reform's approval will pose significant obstacles to the American plan for economic recovery, in a global context where China continues to gain ground. A considerable part of the U.S. recovery will depend on its investment in Mexico.

Passage of the law reform will increase their costs and make it unfeasible for them to have their factories operating here, experts write.

In Mexico, the formally employed population affiliated to the Social Security system (IMSS) is more or less 23 million people, according to official sources.

More than 30 million people work informally, in conditions that in many cases are below the poverty level and that does not allow for the advancement of workers, companies or the country.

According to official data, Mexico sells 50 billion pesos worth of vehicles to the United States each year, 30 billion pesos worth of auto parts, 29.7 billion pesos worth of technological machinery, and 29.7 billion pesos worth of machinery.

The outsourcing scheme allows workers to meet certain labor conditions in today's post COVID-19 market.

"If the Mexican congress passes the outsourcing law reform, we will be sending a wrong foreign policy signal to Washington", he describes.

The United States–Mexico–Canada Agreement states that Members will make changes to labour legislation in Mexico that might affect companies' operation from its member states.

SOURCE Hiroshi Takahashi