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Trade leaders debate reforms, extension of U.S.-Mexico-Canada Agreement

The Senate Finance Committee examined the U.S.-Mexico-Canada Agreement on Thursday, weighing its benefits and where changes may be needed.

Committee Chairman Mike Crapo, a Republican from Idaho, praised the agreement’s role in improving farm profitability but said this summer’s review will be critical for American agriculture.

“It is wise to remember to not let the perfect become the enemy of the good,” Crapo said. “Mexico and Canada are two of our most important trading partners. That strong partnership will continue to drive forward America’s economic competitiveness. This trilateral relationship should not be taken for granted.”

Ranking member Ron Wyden, a Democrat from Oregon, said USMCA is a strong, bipartisan trade deal. However, he said he’s concerned that it’s lacked enforcement.

“Since Donald Trump took office last year, his U.S. Trade Representative has not begun a single enforcement case under USMCA,” Wyden said. “It hasn’t even taken the first step.”

Kevin Brady, a former chairman of the Committee on Ways and Means, testified that strengthening the agreement will help support the supply chain and reduce the country’s reliance on China.

“As customers, together they buy five times more “Made in America” products and services than any other country in the world, supporting 13 million jobs,” Brady said.

Policy specialist Eric Gottwald with the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), testified that USMCA shouldn’t be granted a 16-year extension without major reforms that address worker protections and the trade deficit with Mexico.

“Since USMCA came into force, the United States’ bilateral trade deficit with Mexico has exploded from $125-to-$263 billion,” Gottwald said.

Paul McCarthy, president and CEO of MEMA-The Vehicle Suppliers Association, said the agreement is working for American manufacturers.

“It has strengthened domestic manufacturing and driven growth for suppliers,” McCarthy said.

Ted Vander Schaaf with the Northwest Dairy Association testified that he wants the USMCA review process to address how Canada has been managing its tariff rate quota system.

“Canada continues to administer its dairy TRQs in a manner that restricts imports by reserving the vast majority of quota volumes for domestic processors who lack incentives to import,” Vander Schaaf said. “Meanwhile, distributors get minimal amount of quota while retailers, restaurants, and food service operators are excluded entirely.”

Vander Schaaf added that U.S. dairy farmers have essentially been denied market access by Canada.

USMCA is scheduled for review and possible renewal in July of 2026.