Trade Agreement between Mexico, USA and Canada

Are companies prepared to face a new trade scenario?

www.pwc.com/mx/tmec

Contents

2 PwC Mexico

1. About the survey 3

2. Introduction 5

3. Mexican companies, are they ready for the USMCA? 8Other fundamental aspects

4. 360° Review: What are the possible effects of the USMCA? 12Foreign trade and tax policy The strategic view of supply chain operations Anti-corruption and compliance programsThe new legal challenges of e-commerce

5. How to adapt to the new trade environment? 19Final remarks

1About the survey

www.pwc.com/mx/tmec

4 PwC Mexico

About the survey

On September 30, 2018, the governments of the three North American countries agreed to a new trade agreement. The United States, Mexico and Canada Agreement (USMCA), if approved by each country’s national legislatures, would replace the North American Free Trade Agreement (NAFTA), which has been in force since 1994.

The additions and modifications to the chapters of the current USMCA include important changes in comparison to NAFTA, especially on subjects such as regional content (which has a vital impact on the supply chain and related administrative procedures), anti-corruption measures (Chapter 27), labor wages, environmental considerations, e-commerce and digital trade.

In order to better understand the impact of the USMCA on Mexican companies, PwC launched a survey between October 11 and 26, 2018. The results reflect that companies are generally optimistic about the new regional agreement, since 30% of the participants believe the provisions of the agreement will benefit them, 54% think they will not affect their companies, and only 15% said they would negatively affect their organizations.

Likewise, 62% said their companies will be “quite willing” to continue investing in the North American region, while only 17% said their organizations are “barely willing” to do it; and 21% was indifferent.

Results also show 67% are planning to maintain their investments during the six years following USMCA enactment, while 27% affirmed they would increase investments during the same period.

The provision that worries participants most is the one regarding the rules of origin and certification (62%); followed by the addition of new chapters (22%), and the changes in auditing procedures (12%).

In spite of the high percentage of participants who

expressed concern about the changes in the rules

of origin and certification, 43% said they are

prepared to address and apply the new provisions.

Likewise, 44% stated they are in process of

preparing, and 13% acknowledged they are not

prepared at all.

According to survey participants, their company’s

functional areas that are more involved in assessing

and managing the effects of the USMCA, according

to the survey, are Foreign Trade (16%), Finance

(15%), Legal (15%), Tax (13%), and Operations &

Logistics (13%).

It is important to mention that most of the

participants are top decision makers in their

organizations: 23% are Chief Financial Officers

(CFOs), 19% are members of the Board of

Directors, 17% are Chief Executive Officers

(CEOs), and 13% belong to the leading business

unit of the company.

Most of the executives surveyed work in the

manufacturing (23%) and automotive (15%)

industries, followed by consumer markets (10%),

professional services (9%), technology (7%),

telecom, energy, banking, healthcare and

pharmaceutical (4% each).

The aforementioned figures raises the question as

to whether companies are really prepared to face

the changes of the new agreement, or whether they

have performed a detailed assessment of their

ability to comply with the requirements and

procedures established by the USMCA.

Introduction

2

www.pwc.com/mx/tmec

6 PwC Mexico

Introduction

After 13 months of negotiations, on September 30 of this year, Canada joined the verbal agreement in

principle between Mexico and the US to sign the new

trilateral trade agreement known as United States, Mexico and Canada Agreement (USMCA).

Although the final text of the agreement still has to be ratified by the Congresses of the three countries, it is

expected to be ratified as early as mid-2019, according

to the statements of the Mexican Economy Secretary, Ildefonso Guajardo. USCMA then could be effective

starting in 2020.

The new agreement constitutes the largest trade pact

in its class, and was one of the main campaign

promises of the current US President. The first round of negotiations started in August 2017 in Washington DC.

During the process, the differences and interests of the

three countries generated uncertainty on the future of the agreement and its trilateral format, some thought it

would be divided into bilateral treaties at the end.

Although the USMCA is based on NAFTA, there are

new chapters and provisions affecting areas such as:

the percentage increase of regional content in the automotive industry, the anti-corruption and anti-bribery

measures, requirements around high-wage labor

manufacturing thresholds, intellectual property rights protections, and new standards for e-commerce,

among others.

In spite of these changes, most of the companies

surveyed for this study do not foresee important

disruptions in their operations and investments in North America. Most of the participants said they are “quite

willing” to continue investing in the region, and 67% will

maintain investments as planned.

Nonetheless, companies are also finding new challenges with the arrival of the USMCA, such as higher operations and supply chain costs, a potential increase in the administrative load and their internal resource capabilities to address and apply the new provisions of the trade agreement.

Although the USMCA is keeping alive a strategic treaty for Mexico and the US, putting an end to more than one year of uncertainty, some events might affect the trade relationship among the three countries. One of these is the tariffs maintained by the US and Canada on Mexican steel and aluminum. Another is the potential additional tariff under consideration by the US government based domestic security concerns, on vehicles that do not qualify for preferential treatment under the agreement.

As for the US, the Congress could approve the agreement after the election of the new members of the House of Representatives and the Senate in November 2018 and their swearing-in in January 2019. In Mexico, the agreement is expected to be analyzed and approved by the end of 2018 or the first half of 2019. Additionally, once the treaty is approved and enacted, Mexico’s Congress must make the necessary amendments to existing law, based on certain legislation, some of which have already been announced as part of the legislative agenda, regarding issues like anti-corruption and labor.

Facing a continuously changing scenario, companies in Mexico must be on the lookout for these events and assess the impact they will have in their business operations and strategies, depending on their industry.

Facing a continuously changing scenario, companies in Mexico must be on the lookout for these events and assess the impact they will have in their business operations and strategies, depending on their industry.

Mexican companies: are they ready for theUSMCA?

3

www.pwc.com/mx/tmec

9 PwC Mexico

Mexican companies: are they ready for the USMCA?

The US negotiating team announced the main points and chapters on which they wanted to make important amendments, additions and in some cases deletions during the renegotiation of NAFTA, which started in August 2017 in Mexico, the US and Canada.

Media coverage generated a lot of expectations in the national business sector, provoking an uncertain environment.

However, as expected, once the three governments reached a new agreement, the uncertainty was over, clearing the way to a stage of USMCA’s impact analysis and assessment.

In order to understand how Mexican companies are preparing themselves for the new North American trade agreement, PwC carried out a survey between October 11th and 26th. Overall, results show decision makers believe the new agreement will not generate important changes in the Mexican business sector.

This is worth noting, since it may imply a question of whether Mexican companies have performed a rigorous assessment of all the process and procedures they will have to modify in order to align to the requirements set forth by the new agreement, or if they are simply waiting to see how things go during the approval processes in the three countries.

For example, more than half of the survey participants think the provisions of the USMCA will not affect their companies in comparison to the current NAFTA, and one out of three said the agreement would benefit their organizations.

Additionally, business leaders do not find in the new agreement any elements that could prevent investments in the three countries.

It is important to mention that 23% of the participants were Chief Financial Officers (CFOs), 19% are members of the Board of Directors and 17% are Chief Executive Officers (CEOs). Likewise, the industries with higher participation levels were the following: manufacturing (23%), automotive (15%), consumer (10%), professional services (9%), and technology (7%).

Do you think the provisions of the USMCA will benefit or damage your company, compared to the current NAFTA?

They will not affect my company

They will benefit my company

They will damage my company

54%30%

16%

10 PwC Mexico

Nonetheless, when asked about how the rules weremodified based on the products they use to operate, 47% answered they suffered little changes, 39% saidthey remained the same, and 14% stated they werecompletely modified.

According to The Washington Post1, the changes in therules of origin will reduce the competitiveness of theregion, since the new agreement demands thecompliance of regional content to have access to thefree fare zone, even if costs rise, particularly in theautomotive sector.

This remark highlights most of the survey participant responses (87%) who said their companies are prepared or in process of preparing themselves, to address and comply with the new rules of origin when the USMCA is enforced.

According to the new provisions of the USMCA, 62% of the executives surveyed said they were “quite willing” to continue investing and operating in North America. For 21% of them, this is not a relevant issue, while 17% said they are “barely willing” to continue investing in the region.

In this sense, it is important to note that the US government introduced tax reform at the end of 2017, which reduced the corporate tax rate from 35% to 21% to promote investment. The US is the second destination, after China, to receive more investments from business leaders of the Asian Pacific Economic Cooperation group (APEC), according to the results of APEC’s CEO Survey 2018.

Some of the most important aspects of the USMCA are the increase of regional content in certain sectors such as the automotive industry (from 62.5% to 75%), and additions to the chapters on labor, anti-corruption, and environmental protections, among others.

When asked how their investments could be affected in the next six years with the USMCA, 67% of the companies said they will remain the same, 27% stated they will increase, and only 5% think they will decrease.More than half said the provision of the new trade agreement that worries them the most are the changes in the rules of origin and certification, followed by the addition of new chapters and the modifications in auditing procedures.

1 Bown, Chad (October 9, 2018). The 5 surprising things about the new USMCA trade agreement. Consulted in October 30, 2018 at: https://www.washingtonpost.com/news/monkey-cage/wp/2018/10/09/the-5-surprising-things-about-the-new-usmca-trade-agreement/?utm_term=.46023cec0f24

Which provisions of the USMCA worry you the most?

4%12%

62%

The changes in the rules of origin and certification

The addition of new chapters

The changes in auditing procedures

Other

22%

11 PwC Mexico

More than half of the companies discarded the view that new USMCA provisions would generate a larger administrative load. Fifty eight percent of participants said it would remain the same. However, 40% believe the administrative load will increase in their organizations due to the new agreement. Only 1% said the load would decrease.

One critical aspect of the survey was asking companies which functional area in their organization would be in charge of addressing and applying the changes specified in the USMCA. The responses fell into several distinct categories.

According to the participant responses, the Trade and Finance functions will be the main areas responsible for assessing and managing the changes brought by the USMCA to their organizations, each area got 16% of the answers. The following other departments will have responsibility for compliance: Legal (14%), Tax (13%), and Operations & Logistics (12%). It is worth mentioning only 12% considered corporate C-Suite as the main unit to assess and manage the changes generated by the new agreement, which could affect the business strategy.

As for human capital preparation, participants were asked about the level of technical knowledge and specialization of their key staff having responsibility over trade agreement implementation. Thirty nine percent answered that their staff is “somewhat specialized” in the subject, while 34% said it is “little specialized”, and 27% stated their workforce is “highly specialized”.

Chapter 24 of the USMCA covers environmental regulations. When asked if their production processes are aligned to the environmental measures introduced by the new agreement, 53% of participants answered they are, 36% said some of them are aligned, and 10% considered their processes will have to be modified.

Other fundamental aspects

At the end of January 2018, the three partners of NAFTA announced in Montreal an agreement on the anti-corruption chapter of the new treaty. The proposed Chapter 27, covering corruption and bribery prevention measures, did not exist in the 1994 agreement.

This chapter was well received by the business community. The results of the survey show 60% of the participants think these provisions will improve the business environment in their sectors. While 28% discards an impact on the business environment, and 12% believe they will not improve it.

On the other hand, the new trade agreement will expand the intellectual property measures contained in Chapter 17 of the USMCA, which address matters such as the responsibilities of internet services providers on the notification and removal of non-compliant content.

Regarding the new provisions on intellectual property, 65% said they would not affect their sector, 31% considered they will be positive, and 4% believed they will be harmful.

This chapter is relevant for the US, since it represents a large amount of the most important technological companies in the world, and it applies stricter standards to protect copyright, brands, patents and industrial secrets.

An important aspect of the USMCA for companies is the series of changes that can affect their operations and supply chains by application of the new regional content rules and the requirements for components that have to be produced in high-labor wage zones. In this sense, anticipated increased costs were the main negative impact identified by the people surveyed.

In spite of these changes, most participants do not believe they will introduce new complexities to their business administration, although an important percentage does foresee such a scenario.

360° Review: what are the possibleimpacts of the USMCA?

4

www.pwc.com/mx/tmec

13 PwC Mexico

360° Review: what are the possible impacts of the USMCA?

Based on the results of the survey, it is clear that some functional areas will be more involved in the impacts assessment and process management of the agreement between Mexico, the US and Canada.

Understanding and anticipating the challenges and opportunities the USMCA will bring will allow companies to be better prepared and, therefore, to enjoy more quickly and completely the benefits offered by this trade agreement.

Foreign trade and tax policy

The modification, addition and elimination of provisions generated by the new USMCA, will have several impacts on different sectors. These impacts have been classified into two main categories: 1) procedures and formalities, and 2) regulatory compliance.

Regarding the procedures and formalities it’s important to say that, regardless of the sector or business line, there are new provisions on procedures that will affect or benefit USMCA users. Some of these are the self-certification of the origin of the goods by the importer and the fact that the origin certification cannot be issued based on simply “considering” a good qualifies as originating. That is to say, the new provision specifies that a good will be certified based on the proper information, supporting data and documentation.

In addition, this new trade agreement includes more robust verification procedures, including the possibility of making materials providers subject to origin verification.

As for regulatory compliance, it is essential to remember that the most important ones to access tariffs preferences are the rules of origin, which under the new USMCA, suffered many modifications by specific industrial sector; and depending on the modification, it would be possible to determine if the sector is benefited or negatively affected.

According to the results of the survey, 86% of participants answered the rules of origin applying to originating products used in their operations were slightly or not modified at all by the rules of the USMCA. The remaining fourteen percent said the rules of origin applicable to their sector were completely modified. As expected, this percentage increases in the automotive (42%) and manufacturing (22%) sectors.

Some of the sectors that could be negatively affected by the tougher rules of origin, and which would require a more thorough processes analysis and assessment are the automotive, textile and clothing, and television manufacturing sectors.

In contrast, some of the sectors that could be benefited, in the sense of increased flexibility to comply with the rules of origin for the application of tariffs preferences, are the chemical, pharmaceutical and soft drinks sectors.

To what extent changed the rules of origin applicable to the products you use in your operations, which were manufactured in the USMCA?

47%39%

14%

Little modifiedRemained the sameCompletely modified

14 PwC Mexico

Product engineering and design: in some cases, restating the analysis and conceptualization of products will generate more value, even before establishing supply strategies with vendors. This process should be carried out with the purpose of determining the different materials required for the products commercialized in the USMCA region. The analysis will require the integration of commercial and manufacturing areas to tariffs regulatory managing areas of the company in order to build an integrated vision to obtain the best results for the organization.

Supplier development: as for the supply dimension, the enforcement of the USMCA opens a window of opportunity for local companies in Mexico who want to expand their business/operation lines to promote components and inputs required by manufacturing companies. The recommendation for businesses willing to become strategic providers through the expansion or diversification of their production structure is to consider consistently the alignment of their main capabilities and skills to the corporate strategy in order to prevent “distractions” that could affect their medium-range competitiveness.

Operational strategy: in case of having plants in different regions or countries, it will be necessary to assess where are the product components produced, and understand if the manufacturing footprint should be restructured, as well as the logistics network. Based on this, it will be necessary to clearly analyze the cost implications in the present model in order to look for alternatives to comply with and leverage the provisions of the new trade agreement. Therefore, it is imperative for operational areas to play a key role in the assessment and definition of the best operative strategy to balance complexities and regulatory compliance.

The strategic supply chain vision

Understanding the impact of the new trade agreement (USMCA) in the supply chain is key to comply with the new “rules of the game”, and maintain healthy and profitable businesses with the North American region, leveraging potential new opportunities.

Regarding the supply chain, there are several aspects in the new agreement that could generate a relevant impact on the supply chain depending on the sector; specifically regarding the requirements of the rules of origin, the value of labor’s content, and the clause preventing other trade agreements with “non-market economies”, such as China.

Based on the aforementioned issues, we identified five dimensions within the supply chain, which should be more important in the trade agreement. These dimensions are: 1) Supply; 2) Engineering and product design; 3) Development of vendors; 4) Operational strategy, and 5) Labor value content.

Supply: the new agreement changes the rules of origin requirementsfor the manufacturing industry, mainly for some industries especially important for Mexico like the automotive, textile and electronic. This generates the need of analyzing the origin of the components and materials used in the manufacturing process with the purpose of defining different supply sources through new providers in order to adapt to the new requirements. In this context, it will be necessary to establish supply strategies considering the purchase power of the company and the characteristics of the supply market of every impacted purchase category category required by the organization.

1

2

3

4

15 PwC Mexico

The areas involved in the supply chain should play a strategic role to effectively prepare and respond to these changes. Their impact could imply higher costs, which would translate into margin erosion for companies or the need to redesign pricing models in case the market could absorb them. On the other hand, there are also relevant elements that generate new business opportunities for those companies acting according to the proper vision and anticipation.

It is important to mention that the USMCA also includes new environmental measures that incorporate provisions to guarantee the implementation of environmental legislation in the three territories. These provisions regulate areas such as production, consumption and trade of substances that could harm the ozone layer, the pollution of the marine environment by ships, and the fight against wildlife traffic, including endangered species.

The results of the survey show more than half of the participants have productive processes aligned to the new environmental measures, while one out of three says only some processes are aligned. This allows us to conclude that, even if it will be necessary to adapt some environmental processes, companies do not perceive a large impact on the industry due to the changes in the agreement.

Labor value content: additionally, the automotive industry will have to perform an assessment of labor value, since for 2023 40% of a car content must be built by workers earning 16 dollars an hour. It will be necessary to wait for modifications on the current labor regulations to meet this provision of the new agreement. Human Resources areas, along with Operations, will have an important role in assessing the impact and defining potential scenarios to fulfill them in the best possible way for the company.

According to the results of the survey, almost half (47%) the participants considered there will be increases in the costs of materials and inputs, as well as in operations. Nonetheless, 22% said they do not foresee any impact on their supply chain.

5

How will the provisions of the USMCA affect the supply chain according to your business model? (Choose all that apply)

Materials and inputs costs increaseWe do not foresee any impact on our supply chainIncreased operational costsRisks of increased dependance on certain vendorsDifficulty to find proper vendorsPhysical relocation of operationsAll of the above

27%3%

10%

22%20%

14%

4%

16 PwC Mexico

After analyzing the results, it appears that the optimism and willingness shown by Mexican companies towards fighting corruption is worth mentioning given the effects this action (or series of actions) could have in the national business environment.

Nevertheless, there clearly are challenges to implementing Chapter 27, especially for Mexico, which still has a long way to go in the fight against corruption. With the enforcement of the USMCA, the Mexican companies will have to do whatever is necessary to adopt and reinforce its anti-corruption compliance programs, based on the corresponding international standards, and adapt them to the specific business context and circumstances of every company.

Likewise, the anti-corruption provisions of this trade agreement rise standards and expectations on the current compliance programs. According to PwC’s survey, Global Economic and Fraud Survey 2018-Mexico’s Edition, 87% have formal ethics and compliance programs; however, only 31% has carried out a risks assessment on bribery and anti-corruption, which represents the largest area of opportunity and priority.

What does this mean for Mexican companies in the context of the USMCA? Beyond the optimism many feel about fighting corruption in Mexico, it is necessary to make a deep analysis on how anti-corruption compliance programs have been adopted and how they work in Mexican companies, and if they really comply with international best practices, which would reveal their actual reach and effectiveness. Therefore, it is essential to ask whether the organizations in Mexico are properly envisioning the way USMCA anti-corruption provisions will affect their competitiveness and business strategy beyond regulations.

Anti-corruption and compliance programs

Chapter 27 on anti-corruption was introduced as part of the renegotiation of the trade agreement between Mexico, the US and Canada. The objective of this chapter is to fight corruption practices and actions that could affect commercial exchange and investment among the member countries.

Based on the outcomes of the survey, more than half of Mexican organizations think the measures established by Chapter 27 of the USMCA, will improve the current business environment. In contrast, 12% of them believe the measures will not benefit them; while 28% consider they will have no impact on the business environment.

Do you think the USMCA anti-corruption provisions will generate a better business environment in your sector?

60%

12%

28%

Yes, they will improve the business environment

They will not affect the business environmentNo, they will not improve the business environment

17 PwC Mexico

Every juridical aspect mentioned in this list will trigger a wide range of legal provisions that will imply the compliance of new obligations by digital trade companies, such as the validation of users’ electronic signatures and the publication of documents specifying the procedure to compensate damages.

It will be necessary for eRetailers to carefully assess the processes and procedures they will have to comply to meet the provisions of Chapter 19, because in case of not complying, it could become an obstacle for doing business, besides the potential application of sanctions and fines on behalf of the authorities in charge of their enforcement and supervision.

As a first step, it is important for companies to consider an audit to understand the current conditions of the company regarding electronic commerce, as well as the implementation of several preventive solutions for every aspect listed with the purpose of making of the USMCA a tool to leverage e-commerce and ensure the company’s sustainability by complying with all the regulations enforced on these issues.

The new legal challenges of e-commerce

Today, digital trade has become increasingly relevant in the way commercial transactions are made among people and companies.

This activity has shown a double-digit sustained growth in Mexico (from 16.2 billion dollars in 2015 to 17.6 billion in 2016, a 28% growth)2, since it has reduced merchandise prices and increased customization in satisfying consumer expectations, among other benefits.

Nonetheless, as with every economic phenomenon, the legal aspects regulating several areas grant the parties involved in these transactions increased transparency and safety.

Based on this goal, the negotiators of the current USMCA, considered necessary to add a chapter on digital commerce. This is how Chapter 19 was created considering aspects such as:

• Non-discriminatory treatment of digital products• National framework of electronic transactions• Electronic authentication and electronic signatures• Online consumer protection• Personal data protection• Cross-border data transfer through electronic means• Cybersecurity

2 Asociación Mexicana de Internet (October, 2017). Estudio de Comercio Electrónico en México 2017. Consulted on October 30, 2018 at: https://www.asociaciondeinternet.mx/es/estudios

Understand and anticipate the challenges

and opportunities the USMCA will bring,

therefore, to easily enjoy the benefits

will allow companies to be better prepared and,

offered by this trade agreement.

How to adapt to the new commercialenvironment?

5

www.pwc.com/mx/tmec

20 PwC Mexico

How to adapt to the new commercial environment?

Due to the changes derived from the USMCA, companies face the need to assess the potential impact on its operative model. This assessment covers corporate strategy and organizational capabilities, as well as the operational tax and legal structure.

Companies should consider implementing the following actions at least in the short term, depending on their sector and the type of impact the agreement could have on their operations.

Consider mechanisms to generate tax incentives

We suggest assessing the possibility of implementing business schemes, such as the use of Special Economic Zones and/or the implementation of promotion programs such as IMMEX (maquila or Manufacturing Industry and exports services).

Explore the possibility of modifying the supply chain

Based on the previous analysis, the companies from certain industries should assess supply alternatives for their production (considering the search of vendors in other regions), and promote the development of regional vendors, or establish strategic agreements with specific input suppliers.

Assess specific rules of origin

It is required to assess the current level of compliance and the processes that should be implemented to certify a product as originating as it was manufactured in the region in order to be able to benefit from the tariff preferences established by the USMCA.

Keep up to date on the status of the agreement

• The approval process in the three countries and the corresponding enforcement dates;

• Follow up of the political environment in Mexico, including the incorporation of local regulations to allow the compliance of USMCA provisions.

Final remarks

It is extremely important to define strategies to plan the necessary actions and reduce the potential implications of the agreement, such as its impact on competitiveness due to the costs increase in the supply chain, which would affect the final costumer or would force companies to absorb them.

Additionally, it will be necessary to make a thorough analysis of the modifications and new chapters of the agreement between Mexico, the US and Canada, such as Chapter 19 on digital commerce; and Chapter 27, which levels the ground on anti-corruption issues.

Companies should perform an integrated revision of their operations to identify and assess the actions that must be implemented in the short term to reduce the impact on their business models due to the implications of the new agreement.

21 PwC Mexico

22 PwC Mexico

Contacts

Methodology

The USMCA report was elaborated between October 11 and 26, 2018. PwC obtained a total of 77 answers from companies operating in Mexico.

Twenty three percent of the participants are Chief Financial Officers (CFOs), 19% are members of the Board of Directors, and 17% are Chief Executive Officers (CEOs). The sectors that recorded the highest levels of participation were: manufacturing (23%), automotive (15%), consumer (10%), professional services (9%), and technology (7%).

*In some answers, the total percentage is not equal to 100% because figures were rounded.

Brian DunchPrincipal, Risk & Regulatory, PwC US+1 (703) 835 5994brian.dunch@pwc.com

Scott McCandlessPrincipal, Tax Policy Services, PwC US+1 (202) 312 7686scott.mccandless@pwc.com

Maytee PereiraCustoms and International Trade, PwC US+1 (646) 471 0810maytee.pereira@pwc.com

Anthony TennarielloCustoms & International Trade Leader, PwC US+1 (646) 471 4087anthony.tennariello@pwc.com

Yamel CadoIndirect Taxes and Foreign Trade Leader,PwC Mexico+52 (55) 5263 2330yamel.cado@pwc.com

Carlos ZegarraManagement Consulting Leader,PwC Mexico+52 (55) 5263 5822 carlos.zegarra@pwc.com

Brenda García Tax Policy Leader,PwC Mexico+52 (55) 5263 5759brenda.garcia@pwc.com

Alfredo Hernández Forensic Services Leader,PwC Mexico+52 (55) 5263 6661alfredo.hernandez@pwc.com

Pilar López CarasaLegal Services Leader,PwC Mexico+52 (55) 5263 6152pilar.lopez@pwc.com

Companies should perform an integrated revision of their operations to identify and assess the actions that must be implemented in the short term to reduce the impact on their business models due to the implications of the new agreement.

In PwC Mexico we're responsible leaders committed to the community. We care about the environment and our people, who live diversity and inclusion as part of our culture.

© 2018 PricewaterhouseCoopers, S.C. All rights reserved. PwC refers to the Mexico member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/mx for further details. MPC: 20181128-am-pub-tmec-ing

www.pwc.com/mx/tmec