The lead international trade negotiators from the United States, Mexico, and Canada are in Phoenix this week as their trilateral trade accord, the United States-Mexico-Canada Agreement, or USMCA, nears its fourth anniversary.
Who’s in town? The United States will be represented by U.S. Trade Representative Katherine Tai. Mary Ng, the minister of export promotion, international trade and economic development, will represent Canada, while Economy Secretary Raquel Buenrostro will represent Mexico.
What’s on the agenda? According to the USTR’s office, Tai will meet with both Ng and Buenrostro today. Tomorrow, Tai will serve as host of the fourth USMCA Free Trade Commission meeting.
The three leaders will also hold a meeting with the Inter Tribal Council of Arizona tomorrow.
The big issues: The meeting comes following the Biden administration’s announcement that it would impose a 102.5% tariff on Chinese-made electric vehicles. Chinese automakers are eyeing Mexico for greater investment and access to the Americas, but U.S. policymakers are wary, wanting to ensure that China doesn’t use USMCA to gain tariff-free entry to the U.S.
While his trade minister is in Phoenix, Canadian Prime Minister Justin Trudeau will speak to the convention of the Service Employees International Union in Philadelphia.
Trudeau so far hasn’t taken the same hardline on Chinese EV imports, saying only last week, “Obviously we’re watching closely what our closest trading partner in the United States is doing.”
Squabbles: The three countries have had their share of squabbles in the relatively short life of USMCA. Mexico wants to block the import of genetically modified corn from the U.S., and the U.S. says Mexico has failed to sufficiently open its energy sector. Meanwhile, Canada and Mexico say the U.S. has improperly interpreted USMCA’s rules on automotive content and labor.
Almost time for review: The three member nations in 2026 must confirm in writing whether they want to continue the agreement. If just one member objects, it will kick off a series of annual reviews that will end only when all three countries are satisfied. Failure to achieve each country’s sign-off would mean that the agreement would terminate at the end of year 16.
The business community view: Arizona Chamber of Commerce & Industry President and CEO Danny Seiden says he hopes the three trade leaders double down on their commitment to preserve USMCA as it nears its first review and that they discuss the importance of ensuring fresh produce from Mexico, including tomatoes, can continue to be imported into the U.S. tariff- and duty-free.
“We should be doing all we can to live up to the letter and spirit of USMCA,” Seiden said.
“Unfortunately, special interests in Florida are calling for the Biden administration to hit tomatoes entering the U.S. from Mexico with a big tariff. It’s rank protectionism. U.S. shoppers pay the price, while the Arizona jobs that depend on tomato imports are put in jeopardy.” A 2023 study from Arizona State University said more than 20,000 Arizona jobs are at risk if new tariffs were to be imposed on imported Mexican fresh tomatoes.