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The Challenge of the 2026 USMCA Review

25
Rubric: Economy, Economic Theory
DOI: 10.20542/0131-2227-2026-70-7-14-23
EDN: BKWAYT
E. Komkova, ORCID 0000-0002-6424-8617, lena.komkova2012@yandex.ru
Georgy Arbatov Institute for U.S. and Canada Studies RAS, 2/3, Khlebny Per., Moscow, 121069, Russian Federation.
 

Received 19.01.2026. Revised 07.04.2026. Accepted 29.04.2026.

Abstract. The United States-Mexico-Canada Agreement provides for a mandatory joint review of its operation on the sixth anniversary of its entry into force, which is July 1, 2026. Given that the USMCA brings together three of the world’s top 15 economies and represents the second-largest free trade zone in the world, the outcome of the upcoming review is receiving significant attention. The article analyzes four issues: the interim results of the USMCA agreement’s operation in terms of trilateral trade and the movement of direct long-term private capital; the procedure for conducting a joint review of the USMCA, as specified in Article 34.7 of the Agreement itself and in the United States-Mexico-Canada Agreement Implementation Act; the goals of the United States in the negotiations; and possible scenarios for the development of the situation. There are three main scenarios being considered: the USMCA will be modernized and extended for another 16‑year period on July 1, 2026; negotiations will be difficult and protracted; and an agreement will not be reached. According to the author, the second scenario is the most realistic. This choice is supported by an analysis of the USTR’s actions in preparing for the negotiations, the business community’s opinion on the desirability of extending the USMCA for the next period, and a comparison of the current situation with the successful negotiations between the same three countries to replace the NAFTA with the USMCA, which took place in 2017–2018 during the first administration of Donald Trump. It is claimed that the main conductor and final arbiter of the upcoming negotiations will be Donald Trump, who has not yet made a decision. This uncertainty, along with the US-led “tariff war” and escalating threats, is putting additional pressure on Mexico and Canada. The result could be a “frozen USMCA” that is neither alive nor dead. Accordingly, the free trade zone in North America would be stuck in limbo, leading to an inevitable shift in trade and investment flows away from the two peripheral countries towards the central hub of the United States.

Keywords: USMCA, joint review, possible scenarios, North American free trade zone, North American economic integration, U.S.A., Canada, Mexico


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For citation:
Komkova E. The Challenge of the 2026 USMCA Review. World Eñonomy and International Relations, 2026, vol. 70, no. 7, pp. 14–23. https://doi.org/10.20542/0131-2227-2026-70-7-14-23 EDN: BKWAYT

Contents World Eñonomy and International Relations. 2026, vol. 70, no. 7

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