Introduction
As the deadline for reviewing or negotiating the T-MEC approaches in 2026, Mexico has analyzed four possible scenarios. Kenneth Smith Ramos, President of the Mexico-US Committee of COMCE, shared his insights on these potential outcomes during a panel at the International Trade Forum of COMCE Noreste, focusing on regionalization in North America: Towards Efficient and Secure Trade.
Scenarios for T-MEC Review
Limited Review
According to Smith, the T-MEC stipulates a review in 2026 to assess its implementation and potential improvements. This does not imply a renegotiation but could involve administrative changes without significant substance.
He mentioned that labor unions and influential groups in the US are likely to push for opening certain T-MEC elements, particularly concerning China’s export restrictions in strategic sectors. This could lead to a demand for either a review or renegotiation of the entire treaty, requiring legislative approval from all three countries.
Successful Reopening
The first scenario involves maintaining the T-MEC without addressing China issues. The second scenario assumes that if the US requests renegotiation, it would follow a similar process to 2019, reviewing some or all chapters. In this case, the T-MEC would be relaunched for another 16 years, extending its validity to 2042, compared to the current expiration date of 2036.
Recurring Review
Smith also outlined a scenario where the US decides not to close negotiations, leading to annual reviews instead of immediate agreement. If no agreement is reached by 2026, the process would continue to 2029, beyond the potential end of the Trump administration.
He emphasized that Mexico should prepare for potential US pressure tactics, focusing on constructive proposals to enhance the T-MEC, including climate change mitigation, professional mobility, and regulatory convergence on artificial intelligence’s impact on manufacturing.
Risks of T-MEC Rupture
Smith warned that Mexico must prepare not only for aggressive postures but also for constructive collaboration with civil society to improve the T-MEC. He praised Mexico’s negotiation strategy regarding tariffs, noting that while aggressive actions have been directed at countries like Canada, Colombia, and the EU, Mexico has avoided direct confrontation due to T-MEC protection.
However, the US is investigating seven strategic sectors: copper, lumber, semiconductors, pharmaceuticals, trucks, critical minerals, and aircraft. Smith suggested initiating dispute resolution discussions, detailing US T-MEC violations and setting a 75-day response period. Failing to respond would lead to a panel, establishing a legal precedent.
He stressed the importance of starting T-MEC discussions based on free trade principles, avoiding US-imposed tariffs as a starting point, which could be detrimental to Mexico.
Key Questions and Answers
- What is the likelihood of the US exiting the T-MEC? According to Smith, this possibility is only 5%.
- What are the four T-MEC review scenarios analyzed by Mexico? Limited review, successful reopening, recurring review, and the risk of rupture.
- What would a limited review entail? Administrative changes without significant substance, possibly addressing China export restrictions.
- How would a successful reopening affect the T-MEC? The treaty could be relaunched for another 16 years, extending its validity to 2042.
- What does a recurring review scenario imply? Annual reviews instead of immediate agreement, potentially extending beyond the Trump administration.
- What precautions should Mexico take regarding T-MEC rupture risks? Prepare for both aggressive postures and constructive collaboration, focusing on enhancing the T-MEC through climate change mitigation, professional mobility, and regulatory convergence on artificial intelligence.
