Mandatory USMCA Review Begins July 1; Energy Policy at the Center

On July 1, 2026, the first mandatory joint review of the USMCA begins, the process that will determine whether Mexico, the United States, and Canada extend the treaty for another 16 years or enter annual reviews. Mexico's energy policy, particularly the reforms assigning CFE at least 54% of national electricity supply, sits at the center of the trilateral negotiation.

José Medina Mora, president of the Business Coordinating Council (CCE), told El Financiero on June 30 that the private sector has agreed to push for the treaty and expects an extension agreement following U.S. midterm elections. Mexico has a 10-year window to reach that consensus; if it fails, the USMCA remains in force but under annual reviews that Medina Mora described as "an additional complication" for regional trade.

The United States and Canada have kept active since 2022 the USMCA dispute settlement mechanisms over four Mexican energy practices: CFE's dispatch priority, permit delays for private generators, the postponement of ultra-low-sulfur diesel for Pemex, and the discretionary treatment of natural gas transportation that favors state-linked companies, as documented by the Baker Institute at Rice University.

The treaty's architecture does not include a standalone energy chapter, but the national treatment disciplines (Chapter 2) and state-owned enterprises (Chapter 22) require competitive neutrality. That architecture functioned under the 2013 energy reform, came under strain starting in 2019, and entered into direct conflict with the 2025 constitutional reforms.

Mexico imports more than 80% of its natural gas from the United States through pipelines from Texas, a dependency that Energy Secretary Luz Elena González has described as a national vulnerability. CENAGAS committed 87 billion pesos in June 2026 to expand domestic natural gas transportation and storage infrastructure, as reported by Mexico Business News.

The collision between USMCA non-discrimination obligations and Mexican constitutional provisions, which President Claudia Sheinbaum's government does not consider negotiable, represents the central legal knot of the review. Mexico defends its constitutional framework; Washington and Ottawa demand non-discriminatory market access.

A third bilateral round is scheduled for July 20 in Mexico City, led by Economy Secretary Marcelo Ebrard. The outcome of the energy chapter will define the pace of private investment in Mexico's electricity sector over the next decade.

This article was drafted with artificial intelligence assistance from verified sources and reviewed by a human editor before publication.