Introduction
This week, Mexico, Canada, and the United States will formally begin internal consultations for the review of the T-MEC agreement. Although currently, these procedures are merely procedural, two scenarios emerge for Mexico moving forward.
Background on T-MEC and the Review Process
Signed in 2020, the T-MEC agreement includes periodic reviews, with the next one scheduled for 2026. Both the United States and Canada have initiated public consultation procedures, inviting businesses and organizations for comments on the agreement’s performance and potential areas for renegotiation. Washington has even scheduled a public hearing in November to gather evidence on whether to continue or withdraw from the treaty. In Canada, the government will issue a call to civil society and the private sector to collect concerns and priorities, with a particular focus on the automotive sector and trilateral value chains. In Mexico, the Secretariat of Economy announced a 60-day public consultation to receive comments on the T-MEC’s functioning in preparation for the 2026 joint review.
Potential Risks and Implications
Despite being a mere formality, the review process is not without risks. Given Trump’s stance on Mexico and the rest of the world, the US government might use this opportunity to demand substantial changes, not just in trade but also in security or migration. An eventual withdrawal could signal the end of regional integration that has benefited all three countries.
Mexico’s Proactive Measures
Anticipating US pressure to allow Chinese imports through the backdoor in Mexico, particularly in the automotive and electronics sectors, Mexico has started to take action. The government decided to apply the maximum tariff allowed by the WTO, up to 35%, on products from China and other extraregional countries in 17 strategic sectors.
- Sectors covered: automotive parts, steel, textiles, footwear, electronics, and more.
- Objective: To mitigate trade diversion and protect domestic industries facing increased Asian competition due to global trade wars.
These tariffs not only respond to external demands but also signal Mexico’s alignment with the North American agenda, anticipating potential disputes in T-MEC dispute resolution mechanisms and conveying a message of cooperation and further trade integration to the US.
Beyond Trade: Other Influencing Factors
While limiting unfair Chinese competition in the North American market is a shared intention between Trump’s first term, Biden’s administration, and the current government, other crucial factors beyond trade will continue to shape Mexico’s commercial relationship with its partners, especially in security matters.
