USMCA Forward
Building a more competitive, inclusive, and sustainable North American economy

At the moment, the USMCA has support from all three of its members’ governments: The U.S., Mexico, and Canada. However, the overwhelming political support should not be taken for granted or considered as an immediate measure of success. Rather, policymakers and thought leaders would be wise to approach the trade agreement as something nascent, requiring consistent time and attention. To succeed, all three nations will need to take measures to deepen their economic relationships, create opportunities for the middle class and labor, as well as address the effects of climate change. If handled properly, the USMCA could serve as a paragon of how like-minded democratic nations can uphold a respect for fair competition and trade and commitment to the rule of law—despite the rise of near-peer competition with countries like China.

The Brookings USMCA initiative has started to create a roadmap for such a success. Over the course of 2021, Brookings convened a series of roundtables and engagements with government officials, key stakeholders from industry, and civil society. In September, the initiative released a policy brief that identified key priorities for building a more competitive, inclusive, and sustainable North American economy. Now, we are proud to launch this flagship report as the first in an annual series that will examine the USMCA’s actions over the course of the previous year, providing an assessment for areas of progress as well as identifying areas for improvement.

With contributions by experts from the U.S., Canada, and Mexico, this year’s report dedicates one chapter to each of the five policy priorities outlined in the September 2021 policy brief: (1) increasing North American competitiveness with a particular focus on Mexico; (2) building more resilient supply chains; (3) expanding use of data and digital technologies and aligning on appropriate regulation for a digital economy; (4) strengthening labor standards; and (5) cooperating on climate change, including on issues of clean technology.

In addition, senior government officials, union representatives, business leaders, and academics have contributed “Viewpoints,” or essays, that discuss USMCA priorities and challenges from a range of perspectives. They include viewpoints from U.S. Trade Representative Katherine Tai, Canada’s Trade Minister Mary Ng, and Mexico’s Secretary of the Economy Tatiana Clouthier, as well as AFL-CIO President Liz Shuler, Unifor President Jerry Dias, and more.

Despite their different perspectives, two key messages emerged from these viewpoints. The first is that all stakeholders across North America see the USMCA as an important opportunity for the region. The second is that many see USMCA as a turning point in North America for a less contested relationship than was the case under its predecessor, the 1993 North American Free Trade Agreement (NAFTA). At the same time, the report also illustrates how important it is for all governments to implement their USMCA commitments. From this perspective, efforts by President Obrador to change Mexico’s energy market and the proposed EV tax credits in the U.S. are of particular concern because they are likely inconsistent with USMCA commitments, would undermine confidence in the USMCA as a stable framework for trilateral trade and investment, and in the case of Mexico, would undercut the government’s ability to achieve its climate goals.

Recognizing this kind of constant push and pull between policies, the Brookings USMCA initiative is an important growing resource. Alongside this report, the initiative plans to launch a number of other products, including a USMCA Tracker, which will be an online resource dedicated to providing comprehensive data on the trade and investment flows across North America and serve as a go-to-source on USMCA meetings and disputes. We believe that by providing independent, world class analyses that identify opportunities and articulate complex domestic realities, the Brookings USMCA initiative will be an essential resource for policymakers and leaders that will help deepen the mutually beneficial cooperation between the U.S., Mexico, and Canada.