The United States-Mexico-Canada Agreement (USMCA), known as T-MEC in Spanish, was signed on November 30, 2018, during the G20 Leaders’ Summit in Buenos Aires, Argentina.
The USMCA was signed on November 30, 2018, and came into effect on July 1, 2020. It is considered an updated version of the North American Free Trade Agreement (NAFTA) of 1994 between Mexico, the United States, and Canada. Although the USMCA builds on the foundations of NAFTA, chapters and provisions were added in various areas, such as increasing the percentage of regional content in the automotive industry, combating corruption and bribery, stricter rules requiring certain manufactured components to be made in high-wage zones, greater intellectual property protection, new rules for e-commerce, among others, as well as the autonomy of judicial bodies in administering labor justice.
NAFTA consisted of 22 chapters aimed at eliminating trade barriers and facilitating the cross-border flow of goods and services between the territories of the Parties; promoting fair competition conditions within the free trade zone; significantly increasing investment opportunities in the territories of the Parties; adequately and effectively protecting and enforcing intellectual property rights in each Party’s territory; creating effective procedures for the implementation and enforcement of this Agreement, for its joint administration, and for dispute resolution; and establishing guidelines for further trilateral, regional, and multilateral cooperation to expand and enhance the benefits of this Agreement.
USMCA Review in 2026: What to Expect?
Chapter 34 of the USMCA, titled “Final Provisions,” establishes that the Free Trade Commission must meet every six years or less to conduct a joint review of the operation of the Agreement.
Since USMCA took effect on July 1, 2020, the first mandatory review is set for July 2026. However, it is crucial to highlight that the agreement does not explicitly mandate a renegotiation in 2026, only a review of its functioning.
Potential for a Renegotiation?
However, there is a rumor that the 2026 review could turn into a renegotiation, stemming from statements made by U.S. President-elect Donald Trump in October 2024 during his campaign. He mentioned that if he won the November 5, 2024, elections, he would renegotiate the United States-Mexico-Canada Agreement (USMCA). According to Juan Carlos Baker, former Undersecretary of Foreign Trade at the Ministry of Economy and a member of the USMCA negotiating team, based on Trump’s campaign speeches, it can be inferred that he is interested in revisiting issues related to the automotive sector, steel, and restrictions on products from China.
Canada’s Position on Renegotiation
Canada has also weighed in on the potential renegotiation. Prime Minister Justin Trudeau has expressed a preference for maintaining the USMCA, but noted that Canada’s stance will depend on Mexico’s future decisions, as alternative options may be considered.
Additionally, Ontario’s Premier, Doug Ford, criticized Mexico, stating that the country has become a “backdoor” for Chinese automobiles, auto parts, and other goods into Canada and the U.S. markets. Ford suggested that if Mexico does not align its tariffs with Canada and the U.S. on Chinese imports, it should be excluded from USMCA and denied access to the world’s largest economy.
Similarly, Danielle Smith, Premier of Alberta, Canada, has publicly supported excluding Mexico from the USMCA. She argued that Mexico has not been an equal trade partner with the U.S. and Canada, citing concerns over Mexico’s openness to Chinese investment, which she claims is harming the North American manufacturing sector. She has suggested that Canada and the U.S. should consider a bilateral trade approach instead of a trilateral agreement.
Final Considerations
As the 2026 review approaches, the three USMCA member countries will have to decide on the treaty’s future direction. While the official treaty text only calls for a review, not a renegotiation, the U.S. government’s position suggests that renegotiation could become a reality.
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