Key facts
- U.S. and Mexican negotiators are holding a second round of talks in Washington on agriculture and energy.
- President Donald Trump has expressed doubts about renewing the USMCA, stating the U.S. does not need its North American trade partners.
- Agricultural groups are advocating for a 16-year extension of the USMCA with strengthened provisions for farm products.
- Discussions include U.S. demands for increased North American motor vehicle content and access to Mexico's energy sector.
- U.S. agricultural exports to Canada and Mexico exceed $58.6 billion annually, and a failure to renew the pact could be catastrophic for the sector.
U.S. and Mexican negotiators are meeting in Washington for a second round of talks aimed at revamping the North American trade agreement, the USMCA. The discussions come as President Donald Trump has cast doubt on the future of the 32-year-old free trade zone, which also includes Canada. Agricultural groups are urging Trump to extend the pact for another 16 years, seeking duty-free farm products, stronger provisions for genetically modified corn, and improved access to Canada's dairy market.
The closed-door talks are scheduled for Tuesday and Wednesday, following initial negotiations in Mexico City. A key point of contention is the U.S. demand to increase the regional threshold for North American motor vehicle content to 82%, with 50% specifically from the U.S. Canada has been excluded from formal negotiations but its trade minister is engaged with U.S. officials.
Trump has expressed frustration with the USMCA, stating, "I'm not looking to renew it." He has previously imposed tariffs on Mexican and Canadian autos, steel, and aluminum, which he indicated would remain. Trade experts warn that terminating the USMCA could be catastrophic for U.S. agriculture, which relies heavily on Canada and Mexico as its top two export markets, accounting for over a third of global U.S. agricultural exports.
Specific agricultural issues include pressing Mexico to allow ethanol blending with gasoline, which could boost U.S. ethanol exports by $2 billion annually. Additionally, U.S. corn growers are seeking clarification on regulations for genetically modified corn, a significant export to Mexico.
The energy sector is also a focus, with the U.S. seeking to resolve disagreements over Mexico's increased control over its energy sector, which benefits state oil producer Pemex at the expense of foreign investors. The American Petroleum Institute has suggested a mechanism to ensure compliance by state-owned enterprises.