Mexico seeks USMCA deal to avoid annual negotiations

Mexico is seeking to solidify its trade relationship with the United States and Canada by aiming for significant agreements during the second review of the United States-Mexico-Canada Agreement (USMCA). President Claudia Sheinbaum declared that the primary objective is to conclude foundational accords this year, thereby preventing the trade pact's review mechanism from devolving into continuous, uncertainty-generating negotiations. "Our objective is that in this review phase, which is the first year, we can reach agreements so that in the following years it will only be a review of compliance with what we agreed upon this year," Sheinbaum stated during her morning press conference. She emphasized that annual reviews without concrete outcomes "help neither the United States, nor Canada, nor Mexico." Mexican and U.S. officials are scheduled to meet in Mexico City for further discussions on the trade agreement. Mexico's government anticipates progress on understandings that will provide certainty for regional investments and trade. A central point of contention is the U.S. proposal to tighten rules of origin, requiring a higher percentage of North American-made components for preferential tariff treatment. However, Mexico is carefully analyzing this aspect, as the U.S. proposal also aims to prioritize production within its own territory. "They also want these rules of origin to state that a very important part is produced in the United States. There are currently some schemes that say so in the current treaty, but we also have to take care of the Mexican economy. It's not just what they tell us we should do," Sheinbaum asserted. Mexico is also pushing for a reduction in U.S. tariffs on steel, aluminum, and automobiles, imposed under Section 232 of U.S. trade law. "Obviously, we want a reduction in the tariffs on steel, aluminum, and automobiles under Section 232. And in that dialogue, we are seeing how we can reach agreements," the president added. The USMCA review process, initiated this year, is designed to periodically assess the agreement's functioning since its implementation in July 2020, replacing NAFTA. The current review occurs amidst ongoing trade tensions among the North American partners.

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Our objective is that in this review phase, which is the first year, we can reach agreements so that in the following years it will only be a review of compliance with what we agreed upon this year.