Yesterday the United States Trade Representative published a notice outlining the process for public consultation in advance of next year’s review of the United States-Canada-Mexico Agreement. The public has the opportunity to submit comments by November 1, a public hearing will commence November 17, and rebuttal comments will be due seven days after the hearing’s final day.
Background
The Agreement Between the United States of America, the United Mexican States, and Canada (USMCA) took effect July 1, 2020. Article 34.7 of the USMCA provides for a “Joint Review” of the Agreement by all three Parties — that is, Canada, Mexico, and the United States — on the close of its sixth year, or July 1, 2026. The following are to be addressed during the Joint Review by a “Free Trade Commission” consisting of USTR (acting on behalf of the United States) and like representatives of Mexico and Canada:
- Evaluation of any recommendations for action submitted by a Party and a decision on appropriate actions regarding the same (but note that a Party wishing to make a recommendation for action by the Free Trade Commission must do so at least one month before the Joint Review meeting takes place, or by June 1, 2026); and
- Each Party must confirm if it wishes to extend the term of the Agreement beyond the original 16 years (that is, the original term from 2020 until 2036), which (if adopted) would serve to start a “new” term (from 2026 until 2042) and cause the next Joint Review to occur in 2032. However, if the Parties do not agree to a new 16-year term during the 2026 Joint Review, the Agreement will instead shift to annual reviews starting in 2027.
Procedure and Public Participation
Pursuant to Section 611 of the USMCA Implementation Act (19 U.S.C. § 4611), USTR is required to provide an opportunity for a presentation of views from both the public and the USMCA Competitiveness Committee.
USTR’s notice specifically invites comment regarding:
- Any aspect of the operation or implementation of the Agreement;
- Any issues of compliance with the Agreement;
- Recommendations for specific actions that USTR should propose ahead of the Joint Review of the Agreement;
- Factors affecting the investment climate in North America and in the territories of each Party, as well as the effectiveness of the USMCA in promoting investment that strengthens U.S. competitiveness, productivity, and technological leadership; and
- 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.
Process and Substantive Impacts of the USMCA Review
July 2026 marks the sixth anniversary of the USMCA’s implementation. USTR’s notice kicks off the formal phase of stakeholder engagement and consultations. By July 1, 2026, the first mandatory review by the USMCA Free Trade Commission begins. Decision on renewal or a shift to annual reviews will take place as a result of those meetings. If the Parties so agree, the USMCA will be extended for a new 16-year term and the next review will occur in 2032. If any one of the three Parties does not confirm its wish to extend the Agreement, then annual reviews commence for the remainder of the existing term of the Agreement.
It should also be noted that one or more countries could withdraw from the USMCA by providing six months’ of written notice pursuant to Article 34.6, opening the door to a return to bilateral arrangements or expiration well before 2036.
Parallel Processes in Canada and Mexico
Mexico initiated its separate public comment process yesterday. As of this writing, Canada has not yet launched its own public comment period, though published reporting suggests that process may be imminent.
Conclusion
Cassidy Levy Kent has experience at all stages of USTR and USMCA proceedings and is available to assist clients impacted by North American trade flows and that may be affected by the review. Businesses should be aware of the possible outcomes when planning or reviewing their supply chains.