The commercial relationship in North America has transcended significant political changes and will face an upcoming electoral scenario in the next two years that could shape the foundation of its evolution and development. The democratic evolution of the three countries has been intertwined with the dynamism and complexity of commercial relations, where political decisions have been pivotal in constructing an institutional framework that has fostered a successful history over almost 40 years of trade liberalization.
The North American Free Trade Agreement (NAFTA) came into effect on January 1, 1994, resulting from negotiations between the governments of Presidents Carlos Salinas de Gortari and George W.H. Bush, as well as Prime Minister Brian Mulroney during 1991 and 1992. These negotiations emerged in the context of various changes driven by Mexico following the debt crisis of the 1980s, aiming to liberalize an economy marked by protectionism and state intervention.
Simultaneously, as Mexico sought an end to economic isolationism, the United States faced a complex treaty approval process. This was due to the fear that the agreement might lead to a migration of American companies to Mexico, a concern addressed by President Clinton, elected amid the negotiations, who pushed for parallel discussions on environmental and labor agreements to gain Congressional support.
After more than 20 years of the treaty's existence, in 2017, its renegotiation began, driven by then-President Donald Trump, attempting to fulfill a campaign promise to withdraw if necessary modifications were not made. The modernized United States-Mexico-Canada Agreement (USMCA) was signed in December 2019, entering into force on July 1, 2020.
Since 1991, the negotiation and approval processes of both versions of the regionalframework treaty have been subject to multiple political factors crucial to their implementation. From the initial political will to initiate conversations leading to NAFTA, to the negotiations necessary in the legislatures of the three countries, and the various electoral processes and their consequences, it becomes evident that political elements must be considered in the light of trilateral cooperation discussions.
Political will over several decades has forged an institutional relationship among the three countries, allowing for a robust framework of cooperation regardless of individual leadership. The consolidation of democratic institutions in Mexico, the United States, and Canada has been crucial; the election of democratic and pluralistic governments solidifies the foundation for a stable environment conducive to creating conditions of competitiveness and prosperity in each country of the North American bloc, where the common denominator has been sustaining and consolidating a mutually beneficial traderelationship.
Democratic institutionalism, understood as the set of rules guaranteeing the protection of citizens' rights in their relationship with the State and enabling the harmony of private, social, and public activities, is the principle that allows for the continuity of economic, cultural, and trade exchange between nations. Strengthening institutionalism will enable better cooperation mechanisms among the three nations.
While institutionalism is the only way to maintain stability, continuity, and progress regardless of political will, one cannot ignore the weight that politics has and will continue to have in any cooperation process. The political factor in decision-making and the formulation of policies conducive to free trade will determine the historical evolution of economic relations in one of the most prosperous regions, North America, today.
Hence, maintaining a balance and autonomy in the relationship between powers, creating conditions that strengthen citizenship, such as transparency and adressing corruption, maintaining a climate of security and respect for the rule of law favorable to the business environment, are essential elements to consider in the immediate future to continue consolidating this successful and dynamic history of trade relations within the framework of the United States-Mexico-Canada Agreement (USMCA).
Currently, there are hints that domestic politics will impact foreign policy more than ever. Such is the case of the automotive strike observed in 2023 in the United States, which, if it had persisted, would have affected the supply chain in this sector, causing a significant negative impact for Mexico.
Changes in governments allow for the adjustment of agendas, and in this regard, the political factor is essential. Undoubtedly, in the trilateral relationship, there are issues to address, with the primary one being reducing the inequality gap, but also ensuring the continuity of democratic institutional strengthening that aids in achieving that goal will be strategic.
Three years after the USMCA came into effect, we find ourselves in an opportune moment for retrospective evaluation. Commercial exchange under the treaty has yielded results under the protection of trade rules, efficiently addressing issues that might otherwise be influenced by local political inertia, such as labor issues. In contrast, the political-ideological foundations of each country have shaped scenarios and opportunities in the evolution of certain sectors, such as energy. Therefore, the political factor must be considered in the 30-year history of success in economic and trade integration.
The geographical position of the region is strategic in the current context of geopolitical conflicts, where access to natural resources, renewable and non-renewable, as well as value chains, will be central to the evolution of global trade. The continuity or discontinuation of a successful process of North American commercial and economic integration will be assessed in 2026, with the six-year review of the treaty. In this context, the relevance of domestic political definitions should not be overlooked.
Every 12 years, the political calendars of the United States and Mexico synchronize, with both countries holding presidential elections. 2024 will witness this, while Canada must conduct its electoral process before October 2025. This implies that by 2026, all three countries will have completed their electoral processes, creating the possibility of three different leaderships from those in place today and thus a negotiation with a new perspective and particular political nuances of each country's domestic agendas.
There is currently an opportunity to recognize that today's political decisions will set the course for the development path sought by each of the nations involved. While the commitment to the institutional framework of the trilateral relationship must prevail, there must also be a specific analysis of the weight of national political elements, which will have regional consequences.