Understanding the Differences Between Review and Renegotiation
The United States-Mexico-Canada Agreement (USMCA) review and renegotiation processes are distinct, but the single variable that could render both concepts meaningless is none other than Donald Trump.
Review Process: A Step in the Right Direction
The review process was initiated by the United States Trade Representative’s Office, followed immediately by Mexico’s government. Mexico has now begun internal consultations regarding the matter, as stipulated by Article 34.7 of the USMCA.
This process is part of the agreement’s periodic joint reviews to evaluate its implementation and functionality, as well as identify potential adjustments or improvements.
The USMCA outlines these joint reviews, and it is expected that trade officials from the three countries will meet to discuss their concerns and suggestions for the agreement’s next phase before the following review.
Renegotiation: A More Drastic Approach
Renegotiating the agreement is a more substantial undertaking. Although the USMCA includes termination rules, sitting down at the table again is a result of political determination, as evident in President Donald Trump’s actions.
Renegotiation implies fundamentally altering the commercial pact’s terms, starting with a blank slate and new offers and demands from technical teams of the involved countries, alongside legislative intervention.
Such a renegotiation could be understandable given the significant political changes in both Mexico and the United States.
The Role of Donald Trump and Mexico’s Political Climate
While Mexico’s self-proclaimed “Fourth Transformation” has dismantled parts of the country’s institutional and democratic life, it has staunchly defended free trade – the very same policy championed by former President Salinas de Gortari.
President Trump has softened his attacks on free trade but continues to use tariffs as a pressure tool against other nations.
A USMCA review, as outlined by the agreement itself, limits the scope for imposing new conditions. However, a Trump-style review would intertwine non-trade issues, taking a bold and potentially volatile stance.
Mexico’s Justification for USMCA Alignment
The Mexican government has paved the way to justify what benefits all: a North American alliance against China’s growing commercial power, now bolstered by Russia and India.
The immigration issue has provided the visuals desired by the U.S. government for television, but now lies in accommodating thousands of immigrants destined for Mexico.
Imposing tariffs on a long list of Chinese products closes a significant consumption avenue for the Mexican market but opens the possibility of maintaining a commercial link, potentially customs-based, with the United States.
The drug trafficking, fentanyl trade, and the immense power held by organized crime – including its political ties – remain weak points in Trump’s conditions.
Key Questions and Answers
- What is the difference between reviewing and renegotiating the USMCA?
Reviewing the agreement involves periodic joint evaluations of its implementation and functionality, identifying potential adjustments or improvements. Renegotiation, however, implies fundamentally altering the agreement’s terms with new offers and demands from technical teams of involved countries, alongside legislative intervention.
- Why might a USMCA renegotiation be more challenging?
Renegotiation requires a more drastic approach, fundamentally altering the commercial pact’s terms. Given political changes in Mexico and the United States, renegotiation could be understandable but also more challenging due to its substantial nature.
- What justifies Mexico’s alignment with the USMCA?
Mexico aims to form a North American alliance against China’s growing commercial power, now supported by Russia and India. This stance is justified by accommodating immigrants, maintaining a commercial link with the United States through tariffs on Chinese products, and addressing drug trafficking and organized crime.
