According to the analysis, this scenario can provide the US president with two incentives: use the possibility of extending the revision annually as a pressure tool to maximize concessions and ensure to ´Car the treatment ‘personally before the end of his mandate in 2028 to “award the political victory.”
“In this context, the intermediate elections of 2026 are the turning point. The result will directly affect the negotiation power of the US Executive for the rest of the mandate, either strengthening it to demand more or weakening it and forcing it to seek a more pragmatic agreement,” he explains.
The third scenario also considers the center as probable because it is assumed that there is no consensus to extend the T-MEC and initiates a “comprehensive and rusted renegotiation of several chapters.”
“(United States) would propose changes to the text (of the rules of origin, some new chapter, eliminate provisions, etc.) and Mexico/Canada would ask for return concessions. It would replicate the 2017-2018 renegotiation process, which included multiple rounds, threats in media, struggles for limit deadlines and, in the end, a modified agreement,” he adds.
The parties, abound, would fight for their interests, perhaps with some clashes and even see that Mexico and Canada can take disputes to the World Trade Organization (WTO) or initiate consultations and, eventually, open a panel, within the framework of the T-MEC.
“On the way, concessions could be made that include legislative modifications, which would activate the participation of the cameras. Finally, a new agreement with significant changes would be reached, which would require ratification of the congresses of the three countries,” he adds.
The result of this scenario would be uncertainty in the first stage, from 2026 to 2028. From 2029 onwards, if renegotiation comes to fruition, the result would be a modified T-MEC.
You can also establish rules of origin “a little more hard and some common definition against China or provisions of digital trade to your liking.”
Mexico can thus relieve uncertainty during the 16 years that it is possible to extend the agreement “and perhaps get improvements in labor mobility or clear rules that exclude the use of section 232 to impose tariffs for national security reasons.”
The analysis center considers that the T-MEC can be renewed at 2042 or beyond improvements that reduce friction and that would strengthen the region:
“If the final agreement is unbalanced in favor of the United States, the consequences for Mexico/Canada would result in a disadvantage position in commercial exchange or more internal policy intrusions.”
