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North America needs USMCA now more than ever

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Editor's note:

This viewpoint is part of USMCA Forward 2024.

When the text of the United States-Mexico-Canada Agreement (USMCA) was finalized in December 2019, no one could have predicted that there would soon follow both a global pandemic and a dramatic geopolitical shift back to great power conflict. These twin shocks to the international trading system have had a destabilizing impact on every continent.

Yet, North America proved particularly resilient. This must be attributed, to some degree, to how the USMCA has allowed our three countries to collectively harness our national advantages. North American business leaders relied heavily on the USMCA as they reshored value and supply chains, reinvesting in manufacturing and our industrial base. Since it came into force, the USMCA has offered a greater measure of certainty, stability, and predictability for those seeking to invest in North America—something that is lacking in other regions of the world. That is why a swift and successful review of the USMCA before mid- 2026 is so critical to the continued resilience of the North American economy.

Since it came into force, the USMCA has offered a greater measure of certainty, stability, and predictability for those seeking to invest in North America—something that is lacking in other regions of the world.

If the future of the agreement is called into question by political disputes or divisions in or between any of our three countries, it would undermine the very thing which safeguarded our prosperity at a crucial inflection point in modern history. We would discourage the capital investment, foreign and domestic, that is desperately needed to avoid recession.

There are those who argue the review process is an opportune time to look at ways to modernize the USMCA. They suggest carefully tailored, bespoke alterations can be made without resorting to extensive renegotiations. This is optimistic. Pulling on even a single thread could quickly unravel all that we have sewn together. It is not a risk worth taking.

The safest and surest course is to simply review the agreement as written, without adding unnecessary complications or amendments. It will only have been six years since the USMCA came into force–too short a time for a comprehensive evaluation of the deal, especially when many of those years have witnessed once-in-a-generation global events.

Canadian, American, and Mexican business leaders have been working closely together to ensure the USMCA is reviewed positively. We are engaging with a broad spectrum of civil society, including labor, to build a data-driven case to demonstrate how the USMCA benefits all North Americans– and all that would be lost if the agreement is not extended.

Business leaders are also actively advocating for our governments to honor the terms of the USMCA by ensuring it is both fully implemented and fairly enforced. Our three governments must take seriously complaints that domestic policies or programs run afoul of either the letter or spirit of the agreement and take steps to ensure they are compliant.

Realizing the full potential of the USMCA also requires us to ensure North America has the necessary infrastructure in place. This includes both an integrated transportation network to support continental supply and value chains and trade-enabling infrastructure to allow goods and services produced in North America to be exported to global markets.

The USMCA was not negotiated simply to promote trade and investment within our shared continental borders, but to ensure that North America develops into an economic and industrial engine that can supply goods and services to countries around the world. It was designed to improve both our competitiveness as well as our ability to compete globally.

Finally, we must recognize some of our foreign competitors have turned their backs on the consensus which has governed the global economy since the end of the Cold War. They moved away from multilateralism and globalization, and in some severe cases have sought to weaponize trade and disrupt the North American economy by various means.

With growing geopolitical tensions in Europe, Asia, and the Middle East, North American economic security is perhaps at greater risk today than any other time in the past half century. In this environment, the USMCA has proven itself to be more than a mere trade agreement, it is a bulwark against global instability. We must ensure it holds firm.

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