The USMCA and the road to shared prosperity in an era of transformation

In 2026, the United States–Mexico–Canada Agreement (USMCA) will undergo its first mandated joint review. This process will take place at a moment when, like Mexico itself, the international economic system is experiencing a profound transformation. The emerging paradigm is being shaped by geopolitical competition, a stronger role for industrial policy, and strategic concerns about the security and resilience of supply chains. For her part, President Claudia Sheinbaum is advancing a development program centered on welfare, social justice, and closing gaps while safeguarding macroeconomic stability and promoting investment.¹

Within this context of profound transformation, this article sets out three core messages to reflect on the joint review of the USMCA. First, it underscores the strategic importance of the USMCA in the current global environment. Second, it highlights the strategic implications of the review and how the agreement can support the priorities of our governments. Third, it outlines Mexico’s diplomatic approach going into the 2026 joint review, which consists of creating the right conditions for a beneficial outcome.

To begin with, in this evolving landscape, the USMCA is much more than a trade agreement; it is an anchor institution and a vehicle for advancing the interests of Mexico, the U.S., and Canada. It is an opportunity to turn economic integration into shared prosperity by easing cost pressures and supporting job creation across the region. The three countries are co-producers within a deeply interconnected manufacturing base in which no country produces alone. Moreover, by promoting reliable access to inputs and goods, the agreement strengthens the strategic security of the region.

Second, to better understand what is at stake, it is helpful to examine the scale and depth of the region’s trade and investment ties. Mexico is not only the U.S.’ top trading partner but, alongside Canada, one of its two most important export markets. From January to November 2025, Mexico accounted for 15.4% of total U.S. exports. Of Mexico’s exports to the U.S., 87% complied with the USMCA as of November, ensuring that products meet the rules of origin specified in the agreement.² On investment, from 2020 to the second quarter of 2025, Mexico received $106.2 billion in foreign direct investment (FDI) from the U.S. and Canada, accounting for 51% of total FDI received in the period. The U.S. is Mexico’s top investor and is followed by Spain, Canada, Japan, Germany, the United Kingdom, the Netherlands, South Korea, and Australia.³

Importantly, the USMCA provides flexibility to pursue the objectives of each government. Increasing national production is not a zero-sum proposition given the region’s deep integration. President Sheinbaum’s Plan México seeks to raise Mexican value added within regional value chains. That means that Plan México will increase demand for U.S. and Canadian products and support high-paying jobs across all three countries. Mexico’s labor policy also contributes to this outcome. The minimum wage has increased by 154% since 2018 and has directly contributed to lifting 6.6 million people out of poverty, which also increases their purchasing power for imported goods.⁴

Third, Mexico’s diplomatic approach ahead of the 2026 joint review has focused on managing its relationships with the U.S. and Canada effectively by keeping issues on separate tracks and addressing each on their own merits, while reinforcing our domestic economy. The goal is to create space for the USMCA to be strengthened and to continue serving as an effective instrument for our countries.

President Sheinbaum has led an active diplomatic effort with both the U.S. and Canada. With the U.S., ensuring coordination and dialogue at the highest level on key issues, such as security, human mobility, and water has been a priority. On security, Mexico is fully committed to addressing this complex challenge. Early results are encouraging: The domestic security strategy has contributed to a 40% reduction in homicides and the dismantling of nearly 1,900 illicit drug laboratories.⁵ In addition to national efforts, following Secretary Marco Rubio’s visit, Mexico and the U.S. announced a renewed security understanding that includes coordinated measures to combat illicit finance, drug and arms trafficking, and generators of violence.⁶ Cooperation between our two countries has also contributed to reducing irregular migration flows significantly.⁷ On water management, both governments have strengthened their binational coordination under the 1944 Water Treaty and have worked to address sanitation challenges at the border.⁸

As it pertains to Canada, President Sheinbaum welcomed Prime Minister Mark Carney to Mexico City in September 2025 and announced the Canada–Mexico Action Plan 2025–2028.⁹ This whole-of-government approach initiative is designed to deepen cooperation across shared priorities, including prosperity, mobility, security, and sustainability. This plan complements the USMCA, which remains one of the strongest pillars of the bilateral relationship.

In parallel, Mexico has implemented measures to transform its economy, consistent with President Sheinbaum’s vision of “development with well-being, guided by the core principle of shared prosperity: for the good of all, the poor come first.”¹⁰ For example, the increase in tariffs on more than 1,400 products imported from non-FTA partners is intended to raise the share of domestic value added.¹¹ Other measures include significant labor market improvements, not only increases in the minimum wage mentioned above or the 2019 reform that strengthened union freedoms, but also a reform for digital platforms that entered into force last year and benefited 1.3 million workers, as well as the reduction of the statutory workweek from 48 to 40 hours.¹² Notably, Ambassador Jamieson Greer has echoed some of these actions and underscored the important role that Mexico plays in strengthening U.S. supply chain resilience in recent remarks.¹³

Finally, the principles that Mexico and the U.S. have agreed to guide their relationship can also serve as a useful compass for the review process itself: respect for sovereignty and territorial integrity, shared but differentiated responsibility, mutual respect and trust, and cooperation without subordination. Anchored in these values, the USMCA represents an opportunity to strengthen a partnership that is rooted in far more than commerce alone. Our countries are bound by history, deep people-to-people ties, strong cultural links, and a shared commitment to advancing prosperity and resilience. Together, these factors provide a lasting foundation for deeper economic integration.