USTR hearing and upcoming six-year review

Last week the Office of the United States Trade Representative convened a public hearing to assess how the United States-Mexico-Canada Agreement (USMCA) is operating, with the accord's first six-year review scheduled to begin on July 1, 2025.

The USMCA entered into force on January 29, 2020, replacing the North American Free Trade Agreement (NAFTA) that had governed trade in the region since 1994.

How USMCA relates to NAFTA and what changed

While many of USMCA's rules, procedures and covered products trace back to NAFTA, the newer pact includes notable updates. Analysts point to stronger environmental and labor provisions and incentives to encourage North American production of cars and trucks.

USMCA is also the first U.S. free trade agreement to include comprehensive intellectual property protections, a feature observers say is especially relevant amid trade tensions sparked by alleged theft of American IP by China and other countries.

NEMA’s presence and industry footprint

The National Electrical Manufacturers Association (NEMA) represents about 300 U.S. electrical-equipment manufacturers. Its members employ roughly 580,000 workers across more than 12,500 facilities in the United States.

The electrical manufacturing sector is the nation's second-largest exporter of manufactured goods, and nearly half of those exports go to Canada and Mexico.

Patrick Lozada’s testimony and call for swift review

At the USTR hearing, Patrick Lozada, NEMA's senior director of global policy, urged a prompt review and renewal of USMCA paired with specific changes to strengthen enforcement in Mexico of provisions that remove technical barriers to trade.

Lozada argued the agreement's framework is vital for the electrical manufacturing sector and for American workers to succeed, and he urged action to "stamp out fraudulent activity" by non-member countries, explicitly citing China.

USMCA’s role in market access and investment

In an interview, Lozada emphasized that a predictable, modern trade framework is critical for industry stakeholders making long-term investments. He said USMCA allows U.S.-based manufacturers to compete on access to a larger North American market and to source inputs from Mexico and Canada, which supports manufacturing in the United States.

Lozada noted NEMA members have invested about $185 billion in U.S. manufacturing since 2018 and said the agreement helps meet both grid needs and U.S. manufacturing goals.

Projected electricity demand and key growth drivers

NEMA projects a roughly 50% increase in U.S. electricity demand by 2050. The association cites several major drivers behind that projection:

• AI and related data centers, which NEMA expects to see about 300% growth over the next decade
• E-mobility power consumption, projected to rise roughly 9,000% through 2050
• Electricity's share of final energy use, forecast to increase from about 21% today to roughly 32% by 2050

Lozada also pointed out that manufacturing itself accounts for about 14% of U.S. energy demand, reinforcing the need for a robust grid.

Transshipment, technical barriers and enforcement concerns

Lozada highlighted transshipment—goods routed through third countries to evade rules of origin or duties—as a pressing challenge that affects all three USMCA partners. He urged the USTR to press Mexico and Canada to strengthen enforcement and called for U.S. Customs and Border Protection to address identified transshipment cases in accordance with U.S. law.

He also stressed the importance of enforcing USMCA's technical barriers to trade (TBT) provisions, saying divergent standards and conformity-assessment procedures can create de facto barriers to U.S. exports. Lozada testified that Mexico has not fully implemented some TBT commitments, which he said has reduced U.S. exports and undermined the regulatory certainty USMCA was intended to provide.

Additional priorities and the long-term review process

Lozada indicated he had outlined other priorities for the agreement's 2026 joint review during his testimony, though those items were not fully enumerated in the hearing summary.

He also described the USMCA relationship as ongoing, anticipating continued dialogue among the three parties. Lozada said NEMA welcomes the USTR's engagement with the private sector to identify opportunities and challenges as the review process continues.