Introduction to Key Players and Meeting
On January 28, Mexico’s Secretary of Economy, Marcelo Ebrard, held his first in-person meeting with Jamieson Greer, the U.S. Trade Representative, and Howard Lutnik, the U.S. Secretary of Commerce, to discuss bilateral trade relations and the upcoming joint review of the USMCA (United States-Mexico-Canada Agreement).
Background and Preparation
This meeting marks the formal start of discussions between Mexican and U.S. representatives to address tariffs imposed by the U.S. on Mexico and progress on USMCA topics. Although this meeting is the first high-level encounter, both countries’ teams have held technical meetings to discuss topics for the USMCA review.
Ebrard mentioned that 80% of the topics have been addressed in these preliminary discussions.
Deadline and Review Process
The deadline for ratifying or rejecting the USMCA is July 1. According to Article 34.7 of the agreement, Mexico, the U.S., and Canada are obligated to meet every six years from its entry into force on July 1, 2020, to conduct the first joint review.
- During this meeting, they evaluate the agreement’s performance, consider recommendations for changes (submitted at least one month before, i.e., by June 1, 2026), and decide on its extension.
- If all three governments confirm in writing (through their heads of government) that they want to extend the agreement, it will automatically continue for another 16 years until July 1, 2048, with a new review in 2032.
- If there’s no unanimous agreement to extend it by that date, the treaty enters a cycle of annual reviews until consensus is reached or it expires automatically on July 1, 2036.
Messages and Differences
Throughout January 28, Ebrard shared optimistic videos about the progress made so far in exchanging teams on trade matters.
While Ebrard’s messages were more general and positive, the U.S. government’s statement was brief and assertive.
Ebrard stated that his meeting with Greer focused on “the next steps” for the joint USMCA review in 2023.
He mentioned significant advances on topics to be addressed in the review, aiming for a “fast and best possible” process.
Ebrard did not mention any proposed amendments to the agreement or new commitments, only discussing critical minerals and supply chain security with his counterpart.
US Trade Representative’s Stance
The U.S. Office of the Trade Representative (USTR) clearly stated that during the Mexican-U.S. officials’ meeting, they agreed to begin formal discussions on USMCA reforms with a focus on stricter rules of origin, critical minerals, worker protection, and anti-dumping measures.
- Proposed reforms include stricter rules of origin for “key industrial goods” and closer collaboration on critical minerals.
- Both parties acknowledged recent progress in bilateral trade relations, committing to resolve pending matters related to non-tariff barriers without specifying the exact issues.
Mexico’s Export Performance Amidst Tariffs
Despite U.S. tariffs, Mexico approaches the starting point with record-breaking total export figures.
Even U.S. President Donald Trump acknowledged that Mexico has received the best tariff treatment compared to other nations subjected to his trade tightening.
Total exports amounted to $664,837 million, with manufacturing exports reaching $608,818 million.
Exports grew by 7.6% overall and 9.8% in manufacturing, despite the U.S. tariffs and the Mexican peso’s significant appreciation against the dollar.
Mexico’s export-driven growth remains evident, with continued reliance on U.S. exports and imports.
However, agriculture and automotive sectors have been negatively affected by changing circumstances.
Though official optimism persists, it’s crucial to recognize that Mexico has conceded too much in key sectors of its economy.
