July 6, 2026
Key points:
- The U.S. Trade Representative decided not to extend the validity of the USMCA in the 1st joint review on the operation of the treaty.
- The USMCA will remain in force until January 1, 2036, and countries will conduct annual reviews to determine whether to extend the treaty for a further 16-year period.
- Bilateral meetings between Mexico and the United States will continue on July 20, 2026.
According to Article 34.7 of the United States-Mexico-Canada Agreement (USMCA), the agreement remains in effect for 16 years following its entry into force, until January 1, 2036, unless all three countries consent to extend its duration for an additional 16 years.
On the sixth anniversary of the agreement in 2026, the ministers of the three countries are required to meet and conduct a joint review to determine whether to extend the validity of the treaty for an additional 16 years beyond the original term.
This joint review mechanism is unique; was proposed by the United States to have flexibility to request modifications or incorporate issues of interest during the validity of the treaty.
It is important to note that the joint review is distinct from the denunciation process outlined in Article 34.6 of the USMCA. Denunciation occurs when a Party notifies its intention to withdraw from the agreement, with such notification becoming effective six months after it is deposited with the other Parties.
On July 1, 2026, representatives from Mexico, the United States, and Canada conducted the first joint review of the USMCA. While Mexico and Canada supported extending the agreement, the U.S. Trade Representative indicated its desire not to extend its validity.
The United States’ decision not to extend the USMCA’s validity does not result in the treaty’s immediate termination. Instead, annual reviews will be conducted until all three countries agree to an extension or until July 1, 2036, when the treaty will expire if no agreement is reached.
Implications:
- The refusal of the United States to extend the validity of the USMCA generates pressure for Mexico and Canada to address the issues that concern the United States.
- Although the U.S. refusal does not end the treaty immediately, it can generate economic and commercial uncertainty for Mexico.
- Bilateral meetings between Mexico and the United States continue, and the next one will be on July 20 in Mexico City.
- In these bilateral meetings, the main topics have been rules of origin, economic security, agriculture, and the automotive sector.
- The Trump administration often resorts to trade pressures to resolve issues of all kinds, so other non-trade issues, such as security and migration, may also be addressed.
- The midterm elections in the United States, which will be held on November 3, 2026, and in which governors and legislators will be elected, are a key date for the future of the USMCA.
The lawyers of Basham’s foreign trade area are at your service to answer any questions regarding the scope and implications of this measure for your company.
SINCERELY,
Sergio Barajas
Alberto Sandoval
Gustavo Guillén
Estefanía Martínez
Note: This newsletter is for informational purposes only and is intended for customers of Basham, Ringe y Correa, S.C. The comments included in this document are based on documents released by the White House and U.S. Customs and Border Protection. Therefore, this bulletin does not contain specific interpretations or address real situations that could be considered as personalized legal advice.