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Will Mexico’s “Kill Switch” Run Afoul of USMCA Digital Trade Rules?
By
Inu Manak and Alfredo Carrillo Obregon
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A controversial proposal to block foreign providers of digital services from offering their services in Mexico if they fail to comply with Mexico’s digital tax rules has just been signed into law. The scope of the law is broad enough to encompass a whole host of digital services that individuals and businesses consume everyday from streaming and dating services to online shopping, and virtually anything that exists in the cloud. The economic costs could also be severe for example, blocking access to YouTube for a single day would cost the economy $18 million USD. As the world pulls itself up from the economic shock of COVID-19, Mexico’s latest action has the potential to dampen recovery efforts, and also to further strain U.S.-Mexico relations. ....

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