By Brayan Ortiz Ramos, J.D. Candidate, 2027
In 2026, the United States-Mexico-Canada Agreement (USMCA), which succeeded the North American Free Trade Agreement (NAFTA) in 2020, will undergo a joint review to assess its effectiveness, consider a 16-year extension, and evaluate potential adjustments to better align with current economic and technological trends.
Mandated by Article 34.7, the joint review occurs six years after implementation to evaluate the USMCA’s performance and identify areas for improvement. Unlike renegotiation, this process assesses existing provisions against member nations’ goals through consultations with policymakers, businesses, and broader civil society.
Key topics expected for review include strengthening intellectual property enforcement, balancing access and affordability for certain pharmaceuticals, adjusting data exclusivity periods, and pioneering AI regulation with common data protection standards and ethical guidelines. The outcome of this process will significantly influence future trade relations in North America and directly affect the region’s over 500 million residents.
I. Intellectual Property (IP)
A. Current IP Protections under USMCA
The USMCA currently includes intellectual property (IP) protections aimed at promoting innovation and economic growth. Key provisions include, amongst others, 70-year post-mortem copyright terms, 20-year patent protections, and safeguards against patent infringement with mechanisms for swift dispute resolution. High-recognition trademarks receive enhanced protection, while geographical indications are secured to prevent misuse, benefiting industries such as agriculture and pharmaceuticals. Furthermore, data exclusivity in the pharmaceutical sector restricts generic manufacturers from using original clinical data for a specified period.
B. Anticipated Changes in IP Protections
One of the primary areas for potential change is the strengthening of IP enforcement mechanisms. While the agreement already provides protections against IP infringement, the upcoming joint review may propose further measures to deter piracy and counterfeiting. These could include the introduction of higher penalties for IP violations, increased resources for enforcement agencies, and more streamlined dispute resolution processes.
Balancing IP rights with public access and affordability will be a key consideration, especially in the pharmaceutical sector. While strong IP protections encourage innovation by rewarding creators, it is important to ensure these protections do not hinder public access to essential goods and services. In the pharmaceutical industry, for instance, the review may consider adjustments to data exclusivity periods or introduce exceptions for public health emergencies. This would help maintain incentives for drug development while ensuring medications remain affordable and accessible to the public.
II. Artificial Intelligence (AI) and Cross-Border Data Transfers
A. Importance of Data for AI Development in Current Provisions
At the heart of AI development lies the availability of vast datasets, which are essential for training algorithms, refining models, and generating actionable insights. These datasets provide the raw material for machine learning algorithms, allowing AI systems to learn and improve over time. The USMCA’s provisions facilitating cross-border data flows play a crucial role in supporting AI innovation by ensuring that data can move seamlessly across member nations, thereby enabling comprehensive and diverse datasets necessary for AI advancements.
Additionally, cross-border data flows are essential for industries that operate on a global scale. Businesses in sectors like e-commerce, finance, and telecommunications rely on real-time data exchange to deliver services, manage operations, and engage with customers across different markets. The USMCA’s digital trade provisions facilitate these data flows, enabling businesses to access and utilize data from various sources.
B. Anticipated Changes within AI and Data Transfers
One anticipated change is the pressing need for better data privacy standards. With the increasing use of AI, there is a growing need to establish common-sense data protection measures that safeguard individual privacy while not inhibiting the free flow of data necessary for AI development. The joint review could become a platform for the adoption of comprehensive data privacy frameworks that align with global standards, ensuring that data is collected, stored, and utilized in a manner that respects individual rights and minimizes risks of misuse.
AI ethics is, similarly, an arena likely to be explored in the review. As AI systems become more integrated into decision-making processes, concerns about bias, fairness, and accountability have gained prominence. The joint review, in anticipation of these potential harms in its early rollout, may introduce ethical guidelines for AI development and deployment, ensuring that AI development adheres to ethical standards, mitigating risks related to bias, misinformation, and surveillance. In practice, separate regulations may also be introduced to manage the use of data in AI applications, focusing on preventing overdependence on data while ensuring that it is used responsibly and transparently.
Furthermore, the review may examine the impact of AI on intellectual property protection. As AI technologies advance, they are increasingly capable of producing ‘original’ content, raising important questions about how such creations should be treated under IP laws. The joint review may explore adapting the IP framework to address the protection of AI-generated content, ensuring that innovators behind AI technologies can safeguard their creations. Similarly, it should also consider the rights of individuals and communities whose data or cultural expressions are used to train AI models, as leaders in AI emphasize that these rights are essential for ensuring fair and ethical use.
C. AI Regulation and International Standards
AI regulation has become a global trend as nations increasingly recognize the need to harmonize standards to address the ethical and security challenges posed by AI technologies. As countries look for ways to support cross-border AI collaboration and innovation, aligning regulatory frameworks between nations is essential. For example, the European Union has taken a leadership role through its AI Act. This legislation introduced strict requirements for high-risk AI applications, including mandatory risk assessments and transparency obligations. The EU’s approach demonstrates how coordinated efforts can establish robust governance frameworks for emerging technologies. This creates a strategic opportunity for the USMCA member nations during their upcoming review. By aligning their AI regulatory efforts with international best practices, they can promote ethical governance while fostering innovation. Such an approach would not only enhance regional collaboration but also position the USMCA as a leader in responsible AI development on the global stage.