USMCA Forward: Building a Competitive, Inclusive, and Sustainable North American Economy

Brookings has launched a significant initiative to assess and enhance the North American economy under the USMCA trade agreement. The project aims to foster a more competitive, inclusive, and sustainable economic landscape across the United States, Mexico, and Canada, building on the foundations of the 2018 agreement.

USMCA Forward: Charting a Course for North American Prosperity

The USMCA initiative, established in January 2021, is a multiyear endeavor by Brookings to analyze the 2018 trade agreement and identify pathways for a more robust North American economy. The project acknowledges the existing governmental support for USMCA but stresses the need for continued attention and strategic action from policymakers and thought leaders to ensure its success.

Key Takeaways

• The USMCA presents a significant opportunity for North America, potentially marking a shift towards a less contentious relationship compared to NAFTA.

• Successful implementation requires concerted efforts from all three member nations to deepen economic ties, benefit the middle class and labor, and address climate change.

• Potential policy actions, such as Mexico's energy market changes and U.S. EV tax credits, raise concerns about consistency with USMCA commitments and could undermine regional trade confidence.

A Roadmap for Enhanced Economic Cooperation

Brookings has been actively developing a roadmap for USMCA's success through various engagements, including roundtables with government officials, industry stakeholders, and civil society. A September 2021 policy brief outlined key priorities, which are further detailed in the initiative's flagship annual report. This report dedicates chapters to five core policy areas:

1. Increasing North American competitiveness, with a focus on Mexico.

2. Building more resilient supply chains.

3. Expanding the use of data and digital technologies, and aligning on digital economy regulations.

4. Strengthening labor standards.

5. Cooperating on climate change and clean technology.

Diverse Perspectives on USMCA's Future

The initiative features "Viewpoints" from prominent figures, including U.S. Trade Representative Katherine Tai, Canada’s Trade Minister Mary Ng, Mexico’s Secretary of the Economy Tatiana Clouthier, and labor leaders like AFL-CIO President Liz Shuler and Unifor President Jerry Dias. These contributions highlight a shared view that USMCA is a crucial opportunity for the region and a potential turning point for North American relations.

Addressing Challenges and Ensuring Commitment

While stakeholders express optimism, the report also underscores the importance of governments adhering to their USMCA commitments. Concerns have been raised regarding specific policies that may conflict with the agreement, potentially jeopardizing confidence in the USMCA as a stable framework for trade and investment. The Brookings USMCA initiative aims to provide ongoing analysis and resources, including a USMCA Tracker, to support informed policymaking and foster mutually beneficial cooperation between the United States, Mexico, and Canada.

Sources

• USMCA Forward: Building a more competitive, inclusive, and sustainable North American economy, Brookings.