The Mexican government said Tuesday it has been promoting a reform aimed at protecting billions of U.S. dollars in remittances Mexican migrants send back annually.
U.S. President Donald Trump has threatened to tax remittances as a way to finance the construction of a wall along the two countries’ borders.
The reform, which is to be presented to Congress, will essentially make it possible for Mexico’s financial institutions to incorporate the technology needed to easily transfer remittances.
“We will submit a reform to Congress to provide the legal support to all of this technological evolution we have begun to see in financial intermediation capacity,” Minister of Finance Jose Antonio Meade told ruling party members of the Senate.
The reform should be ready to debate in Congress by the end of February.
Mexico’s Central Bank estimated that Mexicans working in the United States sent over 24.6 billion U.S. dollars in remittances back to the country last year.
Trump’s proposed policy changes have wreaked havoc on Mexico’s currency and its economic prospects.
“We are paying, and in recent quarters have paid, for the great uncertainty we have regarding our ties with the United States, but if we resolve this uncertainty and anchor it well, that could give our economy some breathing room,” said Meade.
In addition to the uncertainty generated by Trump’s arrival in office, Mexico needed to brace for a decrease in its oil production, he said.
“This is going to be the first year in recent history when we produce less than two million barrels of oil per day,” said Meade.
Also on Tuesday, the Mexican Business Council for Foreign Trade, Investment and Technology (COMCE) backed the government’s stance toward the new U.S. administration.
“We are certain that any decision taken by the Mexican government will be dedicated to guaranteeing and strengthening a strategic bilateral relationship which has brought well-being, prosperity and security for Mexican citizens and Americans,” COMCE said in a statement. Enditem