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The decision by North America’s three largest economies not to immediately extend the United States-Mexico-Canada Agreement last week has generally garnered support across industries, although groups are still adamant that the pact should remain in place in the long run.
The United States, Mexico, and Canada did not immediately extend the trilateral free trade agreement for another 16 years on July 1, a deadline for all three countries to reconvene to discuss the future of the pact. By not extending the agreement last week, the countries are instead opting to launch an annual review process.
Multiple trade groups have cited the critical role the USMCA plays for North America manufacturing and retail supply chains, calling for the countries to resolve outstanding issues and strengthen the deal through future negotiations before extending it.
Below are excerpts from statements from several organizations in response to the decision to delay the USMCA extension.
Alliance for American Manufacturing President Scott Paul
“This review cannot be a rubber stamp. The United States has a critical opportunity to renegotiate the agreement and defend America’s workers. Though China is not a partner in this trade deal, its automakers are working hard to leverage it to infiltrate the U.S. market. A strong USMCA with robust rules of origin would establish a necessary roadblock to Beijing’s U.S. auto market access.”
National Association of Manufacturers President and CEO Jay Timmons
“The administration’s goal, when USMCA was put into place during the first Trump administration, was to pivot manufacturing away from Asia and into the North American continent,” Timmons told Bloomberg. “That has largely happened. We see the ISM (Institute for Supply Management) numbers today proving that to be the case, but there are still some issues.”
Timmons highlighted transshipment, energy in Mexico and agriculture in Canada as areas to be addressed.
“But it has worked so well as a trilateral agreement that I’m hoping that we can get back to that point,” he told Bloomberg.
Retail Industry Leaders Association Director Ellen Jackson
“USMCA provides the certainty retailers need to plan supply chains, invest in North America, and keep goods moving efficiently for consumers. Supply chains take years to establish. A strong agreement helps businesses deliver the products families need and protects consumers from disruptions caused by prolonged uncertainty. To continue sustaining the growth the agreement has spurred, it is imperative to preserve duty-free treatment for USMCA-qualifying goods.”
Consumer Brands Association President and CEO Melissa Hockstad
“Under the review process, the Trump administration has a unique opportunity to elevate an ambitious approach with Mexico and Canada at the table. As the Trump administration continues its trade negotiations, we are confident the president and USTR (U.S. Trade Representative) will build on USMCA’s success with an America First position that strengthens North American competitiveness and supports U.S. manufacturing.”
National Electrical Manufacturers Association President and CEO Debra Phillips
“While a full renewal of the USMCA was not achieved yesterday, NEMA is encouraged that the three countries will continue negotiating toward a stronger trade agreement, while keeping the current terms in place.”
U.S. auto industry joint statement
Several groups jointly released the statement below, including the Alliance for Automotive Innovation, Autos Drive America and the Vehicle Suppliers Association (MEMA).
“The USMCA is a success story for the entire U.S. auto industry, with billions invested in U.S. production and thousands of manufacturing jobs created since the agreement entered into force. It has also been a success story for American consumers, allowing U.S. automakers to provide families with a wide variety of vehicle choices that fit every budget.
“We urge the leaders of the U.S., Canada, and Mexico to swiftly reach consensus on an extension of USMCA that preserves the existing trilateral partnership, returns to preferential treatment for qualifying goods, and continues the stability and predictability that has helped the industry thrive for the past six years.”
Joint statement from textile, apparel, footwear and retail industries
Below is an excerpt from a letter signed by the American Apparel & Footwear Association, the National Retail Federation, the U.S. Fashion Industry Association and seven other groups spanning the U.S., Canada and Mexico.
“Deeply integrated supply chains have developed over decades across all three countries, facilitating substantial trade, investment and jobs in cotton, textiles, apparel, footwear, and retail sectors. To sustain this growth, it is essential to preserve duty-free treatment for USMCA-qualifying goods and maintain strong, enforceable and practical rules of origin.
“The USMCA underpins North American supply chains by establishing clear and predictable rules and providing a long-term framework that supports jobs, investment, and regional trade. Maintaining the Agreement’s core structure will help avoid unnecessary trade disruptions and business uncertainty.”
National Council of Textile Organizations President and CEO Kim Glas
“The USMCA agreement has helped build one of the world’s most integrated textile and apparel supply chains, allowing U.S. and North America textile and apparel manufacturers to compete against heavily subsidized production in Asia,” Glas said in an email sent to Supply Chain Dive. “While USMCA remains in force for now, the administration’s decision not to immediately renew the agreement has introduced uncertainty at a time when stability is essential for U.S. textile manufacturers.
“Mexico and Canada are our industry’s two largest export markets, and the integrated North American supply chain is critical to supporting American manufacturing, jobs, and investment. We will continue to urge the administration to preserve USMCA as a strong trilateral agreement while using the review process to make targeted improvements such as closing loopholes that undermine the yarn-forward rule, strengthening customs enforcement and ensuring the agreement continues to encourage sourcing within North America.”
