Article: Strengthening USMCA and North America's economic cooperation
The United States-Mexico-Canada Agreement (USMCA) will reach its fourth anniversary in 2024 just as Mexico elects a new president-a few months before the United States does the same. While an election in Canada could happen at any time, it is most likely to occur in 2025, still ahead of the review agreed for USMCA in 2026.
Building on its predecessor, the North American Free Trade Agreement (NAFTA), USMCA has unquestionably become a foundation for North American trade and investment. USMCA has helped fuel robust trade growth following the shocks of a global pandemic and provides a powerful vehicle for further growth if used well, as recommended in this piece.
USMCA members have several big issues that they have yet to resolve under the agreement’s dispute resolution processes, and the outcomes will either reinforce or undermine USMCA’s credibility and its ability to continue to deliver for the United States, Mexico, and Canada.
For now, we only have a preliminary assessment of USMCA’s novel features, such as the digital trade chapter and the Rapid Response Labor Mechanism (RLM) after a few years of implementation, nor have the three countries really taken up the regulatory action agenda embedded in USMCA (Chapters 12 and 28).
USMCA implementation is broadly off to a good start. However, achieving the agreement´s full potential depends on three additional factors:
Gaining traction on USMCA’s cooperation chapters in areas such as Small- and Medium- Sized Enterprises, Competitiveness, Good Regulatory Practices, and Temporary Entry for Business Persons;
Developing the potential of USMCA’s Competitiveness Committee; and Leveraging other parallel bilateral and trilateral mechanisms such as the North American Leaders’ Summit (NALS), the High-Level Economic Dialogue (HLED), and the 21st Century Border Management Initiative.
This chapter analyzes these topics, provides a general assessment of the current state of play, and offers recommendations for further actions.
Building on its predecessor, the North American Free Trade Agreement (NAFTA), USMCA has unquestionably become a foundation for North American trade and investment. USMCA has helped fuel robust trade growth following the shocks of a global pandemic and provides a powerful vehicle for further growth if used well, as recommended in this piece.
USMCA members have several big issues that they have yet to resolve under the agreement’s dispute resolution processes, and the outcomes will either reinforce or undermine USMCA’s credibility and its ability to continue to deliver for the United States, Mexico, and Canada.
For now, we only have a preliminary assessment of USMCA’s novel features, such as the digital trade chapter and the Rapid Response Labor Mechanism (RLM) after a few years of implementation, nor have the three countries really taken up the regulatory action agenda embedded in USMCA (Chapters 12 and 28).
USMCA implementation is broadly off to a good start. However, achieving the agreement´s full potential depends on three additional factors:
Gaining traction on USMCA’s cooperation chapters in areas such as Small- and Medium- Sized Enterprises, Competitiveness, Good Regulatory Practices, and Temporary Entry for Business Persons;
Developing the potential of USMCA’s Competitiveness Committee; and Leveraging other parallel bilateral and trilateral mechanisms such as the North American Leaders’ Summit (NALS), the High-Level Economic Dialogue (HLED), and the 21st Century Border Management Initiative.
This chapter analyzes these topics, provides a general assessment of the current state of play, and offers recommendations for further actions.
