The great challenge of the economic gap in the USMCA countries

Homologating working conditions across the USMCA countries would boost the region's position as the world's strongest trading bloc.

In order to establish itself as the world's strongest trading bloc, one of the main challenges facing the North American region is to standardize the labor market of its three member countries. In an environment where labor represents more than 50 percent of production costs, issues such as fair wages, safety, and the rule of law must be guaranteed to the region's workers.

While there has been progress in working conditions in Mexico in recent years, especially the rapid increase in the minimum wage, "significant gaps still persist that hinder integration," explains Miguel Ángel Curiel, general manager of Driscoll's in Mexico, a world leader in the berry market.

Mexican strawberry, blueberry, and blackberry exports reached $4 billion in 2024; 98.5 percent of them went to the United States and Canada. This concentration reflects a trend toward regionalization of trade, seeking proximity to destination markets to ensure freshness.

How has the berry market evolved with free trade in North America?

Over the past 30 or 31 years, since 1994 with the first trade agreement between Mexico, the United States, and Canada, there has been complementary production and consumption.

In the United States and Canada, production occurs primarily in the summer, while in Mexico, it occurs in the winter, with fall and spring being transitional seasons where there is overlap. This complementarity means that berries are available 52 weeks a year in sufficient volumes for the regional market through the participation of these three production areas.

What are the areas of opportunity in agriculture for the three countries?

An important element in the fruit and vegetable sector is the standardization of the labor market. That is, ensuring greater balance between competitiveness and, obviously, wage levels and services for the workforce—for field workers. The workforce in this industry represents more than 50 percent of production costs, and that creates opportunities, doesn't it? It offers certain advantages in an area like Mexico, given that the daily or wage earned in Mexico is still lower than in the United States. A standardization of the labor market would help further integration.

Labor is scarce and limited throughout North America. Without a doubt, we're making progress in Mexico; there's movement, a positive trend, but opportunities remain to standardize the labor market. I think this is the biggest obstacle to better integration.

What could improve for the agricultural sector under the USMCA?

The current trade agreement establishes conditions for the different countries regarding social compliance. That is, farm workers receive what they are entitled to in all three countries, primarily in the Mexican field, but also in the North American field, to ensure good conditions for the workers.

There are also demands through the USMCA to comply with environmental requirements, which we believe is positive. I think there's an opportunity in these two areas for greater compliance and to truly raise production in the three countries to the level consumers are demanding.

What does Mexico need to take advantage of this integration in the face of the new configuration of global trade?

Speaking of the berry sector, the only product of the top four that truly competes globally is blueberries. However, we see a trend in this sector toward regionalization, seeking to deliver the freshest product to the market.

For example, to supply Europe, which is the main market for that part of the hemisphere, production is being developed in Europe, Africa, and the Mediterranean. And you see the same phenomenon in Asia, with China and Vietnam as seasonal producers.

What's driving this? Perishability, how quickly fruits can lose their quality. So, rather than global integration, the trend is toward the development of a regional supply, and that further emphasizes this integration like North America.

If we talk about the region, how viable would it be to transport berries by rail?

Yes, it's an opportunity, but specifically for blueberries, which are a product that endures transportation more, lasting longer on the market. However, other crops, such as raspberries and blackberries, wouldn't survive a train journey. I think the opportunities are limited, especially considering that the greatest value we deliver to the consumer is freshness.

Where in North America are the most berries exported?

Two-thirds of all demand is on the West Coast, and this applies to all foods; and one-third remains on the East Coast. Clearly, the most important states are the largest or most populous, such as California on the West Coast; New York and New Jersey on the East Coast; New England in the north of the country; and finally the entire East Coast from Florida in the south to Georgia… let's say the largest markets are the major population centers.

Source
Milenio-Giselle Soriano

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