I noticed that the Canadians had started their preparation for the six year USMCA review and extension decision under Article 34.7, so I wrote a short piece for the Baker Institute about all this. This is the conclusion:
The USMCA review and extension process is new and untested, and its impact could range from modest adjustments to full-scale renegotiation. Every stakeholder with an interest in the review — businesses, NGOs, unions, academics, and others — should start preparing their views now so as to communicate them clearly to the government officials who will be in charge of the negotiations.
Canada has begun that process, and Mexico and the United States should follow suit quickly. In Mexico, controversies over party control of the Mexican legislature, along with laws and constitutional amendments proposed by the Morena party, may be distracting government officials at the moment. And in the United States, the upcoming presidential election is the primary focus of political attention. Nonetheless, both governments would be well advised to begin efforts similar to Canada’s.
I have been a skeptic about this provision from the start. Doing a review of a trade agreement is fine, but I thought the original proposal for an automatic termination after five years unless everyone agrees to extend was a bad idea, and the modified version we ended up with is complex and convoluted. But it's very hard to say how this will turn out in practice, and I guess we'll find out soon enough whether I was right to worry.
What I might do instead of the current Article 34.7 process -- which perhaps could be tweaked as part of the 2026 review -- is have reviews more frequently than every six years. That may not be worth doing for every trade agreement out there, but North American economic integration is important enough that it's worth taking a close look at periodically. Additional reviews might be of particular value for transparency. The three governments have USMCA meetings regularly, but the general public only gets little snippets of information about was said. A review process could, at least in theory, provide more details on what the governments are talking about under the agreement.
Then in terms of the extension provisions, given that withdrawal is already possible under Article 34.6, I'm not sure a provision requiring an affirmative decision on extension adds much value. However, if there is going to be such a provision, what I think would be useful on the U.S. side is a clarification that Congress gets a formal say in this decision. For example, there could be legislation requiring that in order for the U.S. government to decide not to extend (or, for that matter, to withdraw pursuant to Article 34.7), the House and Senate must both vote in favor. It's not clear to me if Congress meant to delegate away its power here, but now that people are aware of the issue, they should reassert their authority.
When I was writing the piece, all I had was the first session of the Canadian parliamentary committee's meetings, but since then there have been a few more. You can see all of them here.
