Inside the USMCA Review: Timeline, Tensions and What Comes Next

A key date is looming for United States-Mexico-Canada Agreement, the trilateral trade agreement among the U.S., Canada and Mexico that took effect July 1, 2020. Among its provisions, USMCA included a six-year review process aimed to give parties to the treaty an opportunity to weigh in on what is working and what could be improved.

That looming date is July 1, 2026, the six-year anniversary of the treaty.

In this episode of Great Question: A Manufacturing Podcast, Holland & Knight international trade and disputes attorney Patrick Childress provides an update on where negotiations stand, proposed changes to the treaty, and what the outcome of the negotiations could mean for automotive manufacturers. 

“There have been some bumps along the way. It's taken some interesting twists and turns,” Childress says. “One of the major ones of late is that currently there are no ongoing negotiations between the U.S. government and the Canadian government.” 

Additional observations from Childress include: 

• “… the overall dynamic in the negotiations is one where the U.S. government is the one making demands and seeking big changes in the treaty, and the Canadian and Mexican governments are pushing back.” 
• “It's become pretty clear at this point that the parties are going to blow right past that July 1 deadline and continue these negotiations after July 1 …” 
• “… the U.S. government has proposed to increase the requirement for regional value content in automobiles.” Moreover, “the U.S. government has proposed, in addition to this regional value content requirement, a U.S. content requirement—so there would need to be a certain percentage of the value in every traded automobile, a certain percentage of that value would have to come from the United States, specifically, not just the region.” 

How the six-month review process ultimately plays out remains a question. In this podcast, Childress lays out the landscape of possibilities.