Calica Dispute Could Complicate USMCA Review Process

The litigation involving Calizas Industriales del Carmen, S.A. de C.V. (Calica) is emerging as one of the most significant issues in the review of the United States-Mexico-Canada Agreement (USMCA), potentially becoming a friction point during the negotiation process and eventual legislative ratification in Washington, warned Ildefonso Guajardo Villarreal, former Secretary of Economy and former head of the Mexican negotiating team for the agreement.

Calica and Legislative Pressure in the United States

The former official noted that U.S. legislators remain dissatisfied with how the Mexican government resolved this case, meaning that if the treaty reaches the U.S. Congress, the Calica issue will need to be addressed directly.

“Calica will be a point to address if the USMCA review requires legislative ratification in Washington. Many U.S. legislators are upset with Mexico over how this case was resolved. The Mexican state must compensate investors according to the initial agreements; conditions cannot be changed through expropriation,” he stated.

He indicated that this litigation is part of the issues included by the U.S. International Trade Agency within the USMCA review table, along with alleged violations in energy matters, tax treatment of foreign investments, and delays in commitments related to industrial and intellectual property that, he claimed, have not been fulfilled in a timely manner.

The Calica Litigation Before ICSID

Since 2018, the company has sued the Mexican state at the International Centre for Settlement of Investment Disputes (ICSID) of the World Bank under the legacy clause of NAFTA in the USMCA and is demanding compensation of $1.9 billion.

Beyond this point, Guajardo Villarreal considered that, despite the existence of at least 54 critical issues that could affect the negotiation, the process will result in consensus due to the economic weight of the treaty for the three countries.

He maintained that approximately 90 percent of North American companies and organizations view the agreement review positively and have spoken in favor of maintaining the commercial relationship.

The USMCA as the Axis of Bilateral Relations

On the other hand, he dismissed statements by U.S. President Donald Trump, who called the USMCA irrelevant, considering that they do not withstand a deep analysis of regional commercial interdependence.

He noted that key sectors in the United States, such as corn, pork, chicken, and fructose exporters, depend directly on the treaty and have relevant political weight in electoral processes.

Finally, he affirmed that dialogue is the only viable strategy for Mexico, since the USMCA is Washington’s main instrument to ensure bilateral cooperation on various fronts.

He warned that a potential withdrawal from the agreement would imply losing influence capacity in the relationship with the United States.

Regarding tourism, he added that the U.S. government cannot directly impose tariffs on this sector, although it could make it difficult for its citizens to travel abroad, a scenario he considered unlikely since it is one of the most defended freedoms in that country.