By Carlo Dade
Published in Latin America Advisor
The United States-Mexico-Canada Agreement (USMCA) is up for review in July 2026, at which time any of the three countries can opt not to renew the trade accord, an action that would put its future into question. The upcoming review makes 2024 a critical year for the future of the USMCA, as both Mexico and the United States will have presidential elections, and the priorities of the countries’ leaders will determine the future of the trade deal. What are the most important parts of the USMCA review process? How do the Mexican and U.S. presidential candidates view the agreement, and what actions are likely given who is elected in the two countries? What’s at stake in the elections for businesses that are affected by the USMCA?
Carlo Dade, director of Trade & Trade Investment at the Canada West Foundation and member of the Mexican Council on Foreign Relations
(This piece has been modified since publication in Latin American Advisor)
With federal elections in all three North American countries, trying to predict whether the current trade agreement will survive the 2026 review is a mug’s game. But predicting the issues upon which survival may depend is a bit easier from the Canadian side.
Aligning on U.S. engagement with China will feature prominently. In Article 23 Section 6, Mexico and Canada committed to “prohibit the importation of goods into its territory from other sources produced in whole or in part by forced or compulsory labor.” Understood but unwritten is the intention to target imports from China. The Americans claim to have made over 3,000 seizures of suspect goods; Canada has none. Regardless of the reasons, the fact that there is such a large discrepancy will be a problem for Canada irrespective of who is in the White House. But that will be a Canada-U.S. issue. For Mexico, rising Chinese investment in its auto sector will be a point of contention with both Canada and the U.S.
For agricultural issues, Mexico will likewise face united opposition and pressure from Canada and the U.S. on its ban of genetically modified corn for human consumption. Food security and corn in particular have deep cultural significance in Mexico, not found in its partners. Canada and the U.S. on the other hand, are waging a global battle for acceptance of GM crops that is almost existential for their agricultural export sectors and cannot afford the precedent of a ban in North America. Squaring the circle on corn will be difficult.
Meanwhile, Canada is in for good ol’ fashioned beat down on dairy/poultry access. Canada has largely won the North American dispute case on dairy access, but this has only infuriated the Americans. To wave another red flag at the bull, Canada has legislation under debate that would ban any future concessions on dairy access in trade agreements. Given how much Trump bragged about opening the Canadian dairy market, a second Trump administration would be out for vengeance, while a second Biden administration would have incentive to get, and publicly proclaim, the win on dairy that Trump couldn’t achieve.
Finally, if the Americans are unhappy with progress on tri-lateral efforts to stem the flow of fentanyl into the U.S. from source countries Canada and Mexico, it could turn into a poison pill for the agreement.
EDITOR’S NOTE: The comment above is a continuation of the Q&A published in the April 25 issue of the Advisor.