The United States and Mexico are launching formal procedures for a joint review of the United States-Mexico-Canada Agreement (USMCA).
On the 5th (local time), Mexico's Economy Ministry said in a news release, "Today, Economy Minister Marcelo Ebrard and Jamieson Greer, the U.S. Trade Representative (USTR), released the schedule for the first bilateral discussion to prepare for the joint review of T-MEC (the Spanish name for USMCA)," adding, "The negotiating teams plan to hold their first meeting on the 16th (Monday)."
The two countries plan to coordinate the specific scope and key agenda items, including: ▲ reducing dependence on imports from other regions ▲ strengthening rules of origin ▲ enhancing the resilience of the North American supply chain.
The Economy Ministry added, "Minister Ebrard and Representative Greer urged their respective negotiating teams to put their heads together on measures to ensure that the benefits of the trade agreement chiefly return to the parties."
The USMCA is a free trade agreement (FTA) that replaced the North American Free Trade Agreement (NAFTA), concluded on Sept. 30, 2018, and, after some revisions, took effect on July 1, 2020. The agreement is valid for 16 years, and this year the three North American countries—the United States, Mexico, and Canada—must review and analyze each country's implementation as they reach the six-year review point.
Through the USMCA, the three North American countries have expanded market openness in areas such as raw materials and dairy, where they had long been highly interdependent, and significantly raised the share of rules of origin that must be met. Canada and Mexico have exported about 2.5 million domestically made cars to the United States each year tariff-free, benefiting from nearshoring (production in nearby locations).
For automobiles, global corporations that entered Mexico can receive tariff-free benefits if, after building local plants, they raise the share of components produced there to 75% and set the steel and aluminum content needed for body production at 70%, but the Donald Trump administration says those shares should be higher.
President Trump has instead pressured that "the USMCA is meaningless for the United States," saying, "We should sign new bilateral, separate free trade agreements (FTAs) with Mexico or Canada, not a three-country joint agreement."
Through this review, the United States is expected to push its "America First" trade policy, including strengthening the regional value content (RVC) and blocking transshipments aimed at non-market economies such as China. Some observers say the review could drift toward a full-scale renegotiation beyond a check on implementation.
In this regard, Reuters reported that the deadline for the U.S. government to notify Congress whether it will seek changes to the USMCA is July 1.