Understanding the T-MEC Review and AI’s Global Trade
The review of the United States-Mexico-Canada Agreement (T-MEC) may incorporate regulations on Artificial Intelligence (AI), according to a U.S. Congressional analysis.
The T-MEC includes a provision for a joint review process, ensuring the agreement’s ongoing relevance and functionality. This is the first time such a provision has been included in a U.S. trade agreement, with the initial joint review scheduled for July 1, 2026.
AI’s Significance in Global Trade
According to the Organisation for Economic Co-operation and Development (OECD), AI-related trade accounts for 15.5% of global trade.
- Two-thirds of AI trade originates in Asia (69%), 3% in Europe, and 2.5% in North America.
- OECD data on added-value trade highlights China’s demand finality importance for Southeast Asian exports.
- AI-facilitated trade significantly boosts many Asian economies, linked to rapid growth in U.S. and other countries’ IT equipment investments.
- Notably, OECD reports that technology exports from South Korea and Taiwan continued to rise in Q3.
Global Trade Trends Amidst AI Growth
The OECD noted that global trade volumes (goods and services) have been surprisingly robust this year.
- Anticipated concentration of exports in Q1 before anticipated U.S. tariff hikes was stronger than expected, with global trade volumes growing at an annualized rate of 8.1%.
- In Q2, U.S. import volumes fell at an annualized rate of 29.3%.
- The impact on overall global trade growth was partially offset by strong trade in India and continued robust growth in smaller emerging Asian economies.
Key Questions and Answers
- What is the T-MEC review process? The joint review process ensures the agreement’s ongoing relevance and functionality, allowing for potential revisions to specific provisions, such as improving origin rules or addressing emerging issues like AI.
- What percentage of global trade is related to AI? According to the OECD, AI-related trade accounts for 15.5% of global trade.
- Where does most AI-related trade originate? Two-thirds of AI trade originates in Asia (69%), 3% in Europe, and 2.5% in North America.
- How has global trade been affected by AI growth? Global trade volumes have remained robust, with annualized growth of 8.1% in Q1 and continued growth in emerging Asian economies partially offsetting the impact of declining U.S. import volumes in Q2.
