Federal Register Notice<\/a> seeking public input regarding the United States-Mexico-Canada Agreement (USMCA).\u00a0 This long-awaited Notice is the first official step for the United States as part of the three countries\u2019 joint review of the agreement, a process that was agreed to when the first Trump Administration negotiated the USMCA to succeed the North American Free Trade Agreement (NAFTA).\u00a0 The USMCA joint review process could result in significant changes to the agreement that will impact companies and consumers across North America.<\/p>\nThe USMCA was envisioned by the first Trump Administration to modernize North American trade rules and \u201csupport mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America.\u201d1\u00a0The agreement sets out detailed rules affecting a wide range of cross-border commercial activity in North America, including the trade in goods, services, and digital products, investment, government procurement, and the protection of intellectual property.\u00a0 The impact of the rules governing the North American business ecosystem for companies and consumers is massive.\u00a0 For example, in 2024, the rules applied to the cross-border trade of $650 billion goods among the three countries.2<\/p>\n
The public consultations are an opportunity for any interested parties \u2013 including U.S. and international firms, trade associations, and individuals \u2013 to help shape changes to the agreement.\u00a0 According to the Notice, USTR is particularly interested in hearing from the public about the following issues:<\/p>\n
Any aspect of the operation or implementation of the USMCA.
\n Any issues of compliance with USMCA.
\n Recommendations for specific actions that USTR should propose ahead of the Joint Review to promote balanced trade, new market access, and alignment on economic security with Mexico and Canada.
\n Factors affecting the investment climate in North America and in the territories of each member country (i.e., United States, Mexico, and Canada), as well as the effectiveness of the USMCA in promoting investment that strengthens U.S. competitiveness, productivity, and technological leadership.
\n Strategies for strengthening North American economic security and competitiveness, including collaborative work under the Competitiveness Committee, and cooperation on issues related to non-market policies and practices of other countries.\u00a0<\/p>\n
USTR will accept written public comments for 45 days, concluding November 3, 2025, at 11:59 p.m. EST.<\/p>\n
In addition to seeking public comments, USTR will hold a public hearing on November 17, 2025.\u00a0 The hearing will start at 10:00 a.m. EST and will be held in the main hearing room of the International Trade Commission.\u00a0 Requests to appear at the hearing must be filed by the same deadline that applies to public comments: November 3, 2025, at 11:59 p.m. EST.\u00a0 Any requests to appear at the hearing must include a summary of the witness\u2019 proposed testimony.<\/p>\n
On the same day that USTR announced public consultations, Mexico announced its own.\u00a0 According to Minister of the Economy Marcelo Ebrard, public consultations will begin on September 17.3\u00a0Canada solicited public comments between August and October of 2024.<\/p>\n
Tariffs in Focus<\/p>\n
As the joint review of the USMCA moves forward, U.S. tariffs on goods from Mexico and Canada will be a major focus of attention.\u00a0 The United States is currently applying a series of tariffs to certain imports from both countries, including country-specific ad valorem tariffs under the International Emergency Economic Powers Act (35 percent for Canada and 25 percent for Mexico) and sectoral tariffs under Section 232 of the Trade Expansion Act of 1962 that apply to automobiles and auto parts, steel, aluminum, and certain copper products.\u00a0 While USMCA-compliant goods4\u00a0are currently exempt from the IEEPA country-specific tariffs, they are not exempt from the Section 232 sectoral tariffs.<\/p>\n
Mexico and Canada can be expected to urge the United States to eliminate or reduce both sets of tariffs.\u00a0 Other U.S. trading partners have successfully negotiated reduced country-specific and sectoral tariffs in exchange for concessions.\u00a0 For example, in the case of automobiles \u2013 a critical product in North American trade \u2013 Mexico and most other countries currently face a 25 percent tariff.\u00a0 By contrast, Japan negotiated a 15 percent tariff, and the UK negotiated a tariff-rate quota that allows for 100,000 annual imports into the United States with a 10 percent tariff.5\u00a0 \u00a0<\/p>\n
There are indications that the United States may be amenable to eliminating or reducing tariffs for at least some goods from Mexico and Canada, though the details are uncertain.\u00a0 The U.S. priority on tariffs will be to prevent third countries outside North America \u2013 in particular, China \u2013 from taking advantage of these concessions.\u00a0 In his confirmation hearing, USTR Ambassador Jamieson Greer signaled that he will look to strengthen the rules of origin in the agreement to prevent third countries from using Canada and Mexico as a platform to export to the United States: \u201cIt can\u2019t be a situation where countries can just come in, China, Vietnam or somebody, build a factory in Mexico, assemble it with parts from there and send it across and get the benefit of an agreement where they\u2019ve taken no obligations.\u201d6\u00a0\u00a0<\/p>\n
Review or Renegotiation?<\/p>\n
Many observers are debating whether the joint review will be a narrow exercise focused on discrete improvements to the agreement, a broad renegotiation, or something in between.\u00a0 Because this is the first USMCA joint review process \u2013 and the first such process under any U.S. trade agreement \u2013 much is uncertain.<\/p>\n
If the joint review becomes a renegotiation, U.S. asks could cover a wide of range of issues.\u00a0 Beyond tariffs and rules of origin, the Trump Administration has signaled that it could seek expanded market access for U.S. goods (especially for dairy exports to Canada) and seek to address discriminatory practices in Mexico (such as in the energy sector).7\u00a0The United States has numerous other trade-related issues with Mexico and Canada that could find their way into the joint review, including concerns regarding Canada\u2019s softwood lumber subsidies and intellectual property protection and concerns regarding Mexico\u2019s judiciary, customs barriers, and regulatory delays.\u00a0 Non-trade issues, including immigration and drugs, could also factor into the joint review.<\/p>\n
Background on the Joint Review<\/p>\n
The joint review process is set out in the USMCA.\u00a0 Unique among U.S. trade agreements, the USMCA includes a \u201csunset\u201d provision that dictates that the agreement will terminate after 16 years unless the governments of the United States, Mexico, and Canada agree to extend the agreement for another 16 years.8\u00a0 To determine whether the agreement will be extended and to address any other proposals, the USMCA calls on the three countries to meet on the sixth anniversary of the entry into force of the agreement to conduct a joint review of the operation of the agreement.<\/p>\n
The USMCA entered into force on July 1, 2020, meaning that the joint review meeting should take place on July 1, 2026.\u00a0 At the meeting, the parties may make \u201crecommendations for action,\u201d such as proposals to modify the agreement.\u00a0 Any country wishing to make such recommendations is expected to do so at least one month before the joint review meeting takes place (i.e., before June 1, 2026).<\/p>\n
In addition to reviewing and deciding whether to implement proposed recommendations, the three countries are expected to use the joint meeting to decide whether to extend the agreement.\u00a0 If all three countries agree to extend, the agreement will automatically be extended for another 16-year term, and there will be another joint review no later than at the end of the next six-year period.\u00a0 If one or more countries does not agree to extend, the three countries will meet for joint reviews on a yearly basis for the remainder of the agreement\u2019s term (i.e., annual meetings until the agreement terminates in July 2036).\u00a0 At any point prior to the expiry of the agreement, however, the agreement can still be extended for another term of 16 years if all three countries agree in writing that they wish to extend.<\/p>\n
U.S. legislation implementing the agreement \u2013 the United States-Mexico-Canada Agreement Implementation Act \u2013 requires USTR to provide an opportunity for the public to provide input, including through a public hearing, prior to the joint review.\u00a0 The publication of USTR\u2019s request for comments and notice of public hearing satisfies its obligation to publish such notice at least 270 days before the commencement of the joint review (i.e., no later than October 4, 2025).9\u00a0 \u00a0<\/p>\n
The implementing legislation also requires USTR to submit a report to the Senate Committee on Finance and the House Committee on Ways and Means at least 180 days before the joint review (i.e., no later than January 2, 2026).10\u00a0The report must include USTR\u2019s assessment of the operation of the USMCA, any recommendations for action the United States intends to propose at the joint review, and the U.S. government\u2019s position on whether to extend the USMCA.\u00a0 The information gathered through public comments will undoubtedly inform USTR\u2019s report.<\/p>\n
*\u00a0 \u00a0 \u00a0*\u00a0 \u00a0 \u00a0*\u00a0 \u00a0 \u00a0*<\/p>\n
As discussed above, the USMCA joint review could have a major impact on companies and consumers across North America.\u00a0 As the public consultation process begins, WilmerHale is well-positioned to help clients devise strategies to optimize their North American business and end-to-end supply chains, draft written comments, participate in the upcoming hearing, and otherwise navigate the USMCA joint review process.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
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