Mexico is preparing to initiate trade negotiations with Canada as early as May, building on ongoing discussions with the United States regarding the United States-Mexico-Canada Agreement (USMCA). The move comes as the three nations are required to review the trade pact this year, six years after its implementation, as stipulated in the agreement itself.
Marcelo Ebrard, Mexico’s Secretary of Economy, stated on March 9th that discussions with Canada are slated to commence in early May, emphasizing Mexico’s desire to maintain the current framework of the USMCA. “We have always supported that this agreement remain in its current form,” Ebrard said during a public briefing on the results of a consultation regarding the USMCA review, according to reports from Korea Times and Reuters.
The announcement follows a similar move toward review with the United States, with Mexico and the U.S. Trade Representative (USTR) planning to begin preparatory discussions next week. Mexico is aiming to secure continued benefits from the USMCA, particularly regarding regional content rules and supply chain security. The agreement, which replaced the North American Free Trade Agreement (NAFTA) in 2020, has been a key component of economic integration in North America.
Ebrard indicated he plans to travel to Canada with representatives from Mexican businesses to directly engage in the review process. He acknowledged uncertainty regarding the timing of negotiations with the U.S., stating, “Currently, we do not know when they will begin,” as reported by Korea Times.
Mexican President Claudia Sheinbaum and Canadian Prime Minister Mark Carney met at the G7 summit in Alberta in June of last year. (CP Photo)
USMCA Review: Key Areas of Focus
The USMCA review process will focus on several key areas, including reducing reliance on imports from other regions, strengthening regional content requirements, and enhancing the security of North American supply chains. According to the Korea Times, these are the core issues Mexico and the U.S. Will address in their initial discussions. The agreement currently requires 75% regional content for many goods, a point of contention for the U.S., with some advocating for even higher thresholds.
Former U.S. President Donald Trump has previously criticized the USMCA, calling it “meaningless” and suggesting the possibility of bilateral trade agreements with Mexico and Canada instead of the trilateral framework. This stance raises the possibility of significant changes to the existing trade relationship, as noted by Reuters.
Domestic Support for Maintaining USMCA
Despite potential pressure from the U.S. To renegotiate key aspects of the agreement, the Mexican government reports strong domestic support for maintaining the USMCA in its current form. Ebrard highlighted that approximately 80% of organizations and 32 state governments in Mexico favor preserving the agreement, according to a 59-page report released by the Mexican Ministry of Economy. The report indicated that 49% of respondents viewed the USMCA’s impact as “very positive,” while 34% saw it as “positive.”
The consensus, according to the report, is to focus on improving implementation of the existing provisions rather than making substantial revisions. However, analysts, as reported by Reuters, suggest the U.S. Government may increasingly favor a shift towards bilateral agreements with Mexico and Canada.
What to Watch Next
The coming months will be critical as Mexico engages in separate review processes with both Canada and the United States. The outcome of these negotiations will significantly shape the future of trade relations in North America. The initial discussions with the U.S. Next week and the planned talks with Canada in May will set the tone for the broader review process. Observers will be closely watching for signals regarding the U.S.’s willingness to compromise on issues such as regional content rules and the potential for a move towards bilateral agreements.
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