USMCA Review Process to Begin Next Month, Officials Say

Senior trade officials from the United States, Mexico, and Canada announced yesterday that the first major review of the United States-Mexico-Canada Agreement (USMCA) will begin on April 18, 2025. The comprehensive evaluation, mandated by the agreement's "sunset clause," represents a critical juncture for the trade pact that replaced the North American Free Trade Agreement (NAFTA) in 2020.

The announcement came after a preliminary meeting in Washington, D.C., where U.S. Trade Representative Katherine Tai met with Mexican Economy Secretary Marcelo Ebrard and Canadian Trade Minister Mary Ng to outline the structure and timeline for the review process.

What Is the USMCA Review?

Unlike its predecessor NAFTA, the USMCA includes a mandatory "sunset and review" provision in Article 34.7 that requires the three countries to jointly review the agreement six years after its entry into force. That milestone will be reached on July 1, 2026, but the review process is being initiated early to ensure thorough evaluation.

The review serves multiple purposes:

• Performance assessment: Evaluating whether the agreement has achieved its stated objectives of creating a more balanced trade relationship and strengthening North American supply chains
• Implementation review: Examining whether all parties have properly implemented their commitments under the agreement
• Modernization considerations: Identifying areas where the agreement might need updating to reflect technological changes or new economic realities

Following the review, each country must formally decide whether to extend the agreement for another 16 years. If any country declines to do so, the three nations must meet annually to address concerns and potentially negotiate modifications.

"This review represents an important opportunity to ensure that the USMCA continues to serve the interests of workers, farmers, and businesses across North America. While the agreement has delivered many of its promised benefits, we must be willing to honestly assess where improvements might be needed."

— Katherine Tai, U.S. Trade Representative

Key Areas Under Scrutiny

Officials from all three countries have identified several priority areas for the review:

The Review Process

According to the joint statement released by the three countries, the review will follow a structured process:

1. Initial assessment phase (April-August 2025): Technical working groups will gather data on key metrics including trade flows, investment patterns, and employment impacts across sectors
2. Stakeholder consultations (May-September 2025): Each country will conduct extensive consultations with industries, labor organizations, civil society, and other stakeholders
3. Trilateral evaluation (October-December 2025): The USMCA Free Trade Commission will convene special sessions to review findings and identify areas of concern or opportunity
4. Recommendation development (January-April 2026): Officials will develop recommendations for potential adjustments or clarifications to the agreement
5. Decision on extension (May-June 2026): Each country will formally determine whether to extend the agreement for another 16 years

Throughout this process, the trilateral committee established to oversee the review will meet quarterly, with the first formal session scheduled for April 18, 2025, in Mexico City.

Stakeholder Reactions and Expectations

Initial reactions to the announcement reveal differing priorities among key stakeholders:

The American Petroleum Institute has already submitted a detailed position paper emphasizing the importance of maintaining energy integration across North America, while expressing concerns about Mexico's energy policies that have limited private sector participation.

Meanwhile, on Capitol Hill, reactions have largely fallen along party lines. Republican lawmakers have emphasized the need to preserve USMCA's market access benefits while potentially strengthening intellectual property protections. Democratic representatives have focused on enhancing environmental standards and labor enforcement mechanisms.

Political Context and Implications

The USMCA review comes at a politically significant moment for all three countries. In the United States, President Trump has emphasized his role in replacing NAFTA with the USMCA during his first term, calling it a signature achievement that improved terms for American workers and businesses.

The Trump administration has signaled it will approach the review with a focus on enhancing enforcement of existing provisions rather than seeking comprehensive renegotiation. "This is about making sure the agreement is working as intended, not about starting from scratch," noted a senior administration official speaking on background.

In Mexico, where presidential elections are scheduled for June 2025, the USMCA review has become a campaign issue, with candidates offering differing visions of how the country should approach potential changes. Current polling leader Claudia Sheinbaum has emphasized maintaining stability in the trade relationship while seeking greater flexibility on regional content requirements for the automotive sector.

Canada's minority government under Prime Minister Chrystia Freeland has emphasized the importance of preserving exemptions for cultural industries and the managed supply systems for certain agricultural products, which were contentious issues during the original negotiations.

Business Implications and Recommendations

For businesses operating across North America, the USMCA review presents both opportunities and potential risks. Trade analysts recommend several preparatory steps:

• Assess compliance: Review your company's implementation of USMCA requirements, particularly in areas like rules of origin, labor value content for automotive products, and documentation procedures
• Document impacts: Compile data on how USMCA has affected your operations, including both positive outcomes and challenges
• Engage in consultations: Participate in industry association initiatives and government stakeholder outreach to ensure your perspectives are represented
• Monitor developments: Establish a cross-functional team to track the review process and assess potential implications for your supply chain
• Prepare contingency plans: Consider how your business might adapt to potential changes in rules of origin, labor requirements, or other key provisions

"This review is unlikely to result in wholesale changes to the agreement," explained Dr. Elena Ramirez, Director of the North American Trade Policy Center. "However, targeted modifications in specific sectors are possible, particularly in areas where implementation has proven challenging or where technological developments have outpaced the original provisions."

Businesses with complex supply chains spanning all three countries should be particularly attentive to the review process, as any adjustments to rules of origin or regional value content requirements could necessitate operational changes to maintain preferential tariff benefits.

Looking Ahead

While the initial phase of the review process will begin next month, the most substantial discussions are likely to occur in late 2025 and early 2026 as the deadline for extension decisions approaches. The trilateral commission has committed to providing quarterly public updates on the review's progress.

Most trade experts believe that all three countries will ultimately agree to extend the USMCA for another 16 years, potentially with a package of clarifications, interpretive statements, or targeted amendments to address specific concerns.

What remains less certain is whether the review will lead to new side agreements on emerging issues like climate change, digital services taxation, or pandemic preparedness that weren't prominent during the original negotiations.

"The USMCA was designed with flexibility in mind, including periodic review mechanisms precisely because trade relationships evolve," noted former U.S. chief negotiator Robert Lighthizer in a recent interview. "The goal now should be refining the agreement where necessary while preserving the gains achieved for workers, farmers, and businesses across North America."

TariffGlossary.com will continue to monitor and provide updates on the USMCA review process throughout its duration. For more information about the agreement's provisions and implementation, visit our USMCA glossary entry.