What's Happening?
The National Electric Manufacturers Association (NEMA) is advocating for stronger enforcement and predictability in the upcoming review of the United States-Mexico-Canada Agreement (USMCA). During a recent public hearing by the Office of the United States Trade Representative, NEMA's Senior Director of Global Policy, Patrick Lozada, emphasized the need for Mexico to fully implement its commitments under the USMCA. He highlighted the importance of eliminating technical barriers to trade and addressing fraudulent activities by non-USMCA countries, particularly China. The USMCA, which replaced the North American Free Trade Agreement in 2020, is crucial for the electrical manufacturing industry, providing a stable framework for long-term investments
in U.S. manufacturing. NEMA represents 300 companies in the U.S., employing 580,000 workers, and is a significant exporter of manufactured goods to Canada and Mexico.
Why It's Important?
The USMCA is vital for the U.S. electrical manufacturing industry, which anticipates a 50% increase in electricity demand by 2050. This growth is driven by advancements in artificial intelligence, e-mobility, and increased electricity usage. The agreement supports U.S. manufacturers by facilitating access to larger markets and competitive sourcing of inputs from Canada and Mexico. Ensuring Mexico's compliance with USMCA provisions is essential for maintaining regulatory predictability and minimizing export barriers. The agreement's stability is crucial for unlocking long-term investments in American manufacturing, which has seen $185 billion invested since 2018. Addressing transshipment activities and enforcing technical barriers to trade are key priorities for the upcoming USMCA review, which aims to preserve existing tariff commitments and support U.S. manufacturing.
What's Next?
The USMCA review process is expected to be ongoing, with the first six-year review scheduled for July 1, 2025. NEMA is calling for a swift review and renewal of the agreement, emphasizing the need for policy predictability to support long-term investments. The organization encourages the use of mechanisms within the agreement to settle disputes and ensure private sector involvement in the review and implementation process. The USTR's engagement with the private sector is seen as crucial for understanding the opportunities and challenges facing the industry. As the review progresses, stakeholders will continue to discuss the importance of the USMCA in supporting North American supply chains and the reliability of the electrical grid.
