The Treaty between Mexico, the United States and Canada (USMCA) ends on July 1, 2036, but the three countries may extend it for an additional 16 years after each review.
In general, the USMCA requires a formal review of the agreement at least every six years.
These periodic reviews are designed to ensure that the terms of the agreement remain beneficial to all parties and to identify emerging issues for possible revisions.
Verbatim, the USMCA states the following: If, as part of a six-year review, a Party does not confirm its desire to extend the term of this Agreement for another 16-year term, the Free Trade Commission shall meet to conduct a joint review each year for the remainder of the term of this Agreement.
If one or more Parties do not confirm their desire to extend this Agreement for another 16-year term at the conclusion of a joint review, at any time between the conclusion of that review and the expiration of this Agreement, the Parties may automatically extend the term of this Agreement for another 16 years by confirming in writing, through their respective heads of government, their desire to extend this Agreement for another 16-year term.
The USMCA also includes a Rapid Response Mechanism (RRM) to handle labor disputes at plants related to the denial of rights. As of August 2022, six cases had been filed using the RRM.
The USMCA entered into force on July 1, 2020, replacing NAFTA as the free trade agreement for North America.
According to the U.S. Department of State, the USMCA supports mutually beneficial trade that leads to freer markets, fairer trade and strong economic growth in North America.
The agreement creates job opportunities, improves worker protections, prevents forced labor, increases agricultural trade, produces new investment in vital manufacturing industries, protects intellectual property rights, creates similar environmental standards in all three countries, and updates digital trade protections.
In 2021, U.S. trade in goods and services with Mexico totaled $725.7 billion, making Mexico our second largest trading partner.
According to the Department of Commerce, U.S. exports of goods and services to Mexico supported an estimated 1.1 million jobs in 2019 (latest data available).