Mexico Faces the Challenge of Removing Trade Barriers in Agreement with the United States

The Mexican government’s recent commitment to removing various non-tariff trade barriers, as part of a negotiation with the U.S. administration, has sparked debate over Mexico’s true capacity to meet the demands of its main trading partner. The agreement, reached during talks with former President Donald Trump, grants a 90-day reprieve to avoid tariff increases on Mexican goods from 25% to 30%, a measure the United States sees as part of its strategy to combat fentanyl trafficking.

However, experts warn that the broad nature of the commitment—defined as the elimination of “numerous” barriers—and the lack of specifics about which barriers would be removed immediately, have increased uncertainty over whether Mexico can deliver on U.S. expectations in a timely and effective manner. Voices such as César Remis, former head of the USMCA Office, and Roberto Zapata, former Mexican representative to the WTO, point out that without clear boundaries, the reports from the U.S. Trade Representative (USTR), which identify contentious issues such as genetically modified corn, restrictions in the energy sector, and various regulatory practices, could serve as benchmarks.

The energy sector has emerged as one of the main points of tension. Since Andrés Manuel López Obrador’s administration, the strengthening of state-owned companies such as Pemex and the CFE has led to reforms granting them preferential treatment in electricity generation and fuel supply, pushing out private investment and generating ongoing disputes under USMCA mechanisms. This approach has triggered delays in permitting and new competition rules, also affecting foreign investors’ perception of legal certainty.

In the mining sector, the 2023 reform raised requirements for maintaining concessions, made it harder to obtain new titles, and added community consultation mechanisms. These actions, viewed in the U.S. as discretionary hurdles and opaque regulations, have complicated investment in a sector that is strategic for both countries.

The healthcare sector is also under significant pressure. Delays by Cofepris in issuing health registrations for medical devices and pharmaceuticals have created bottlenecks that, according to the industry, hold back innovation and disrupt trade flows. Regulatory delays have also been highlighted by the Mexican Association of Pharmaceutical Research Industries (AMIIF) as an obstacle to Mexico consolidating itself as a regional leader in innovation and the supply of medical products.

In agriculture, regulations on products such as glyphosate and genetically modified organisms—especially corn—continue to create bilateral frictions. Despite recent progress following U.S. victories in USMCA dispute panels, Mexico still maintains restrictions affecting U.S. exporters, closely monitored by American trade authorities.

In other strategic areas, such as digital and customs trade, both logistical and regulatory challenges remain, hampering the efficient flow of goods, particularly for small and medium-sized businesses and express shipments. Technical differences in customs procedures, along with regulatory barriers in telecommunications and digital services, have also been cited as unresolved issues in the ongoing trade liberalization process pursued by both countries.

The insurance sector has not escaped scrutiny either. The Mexican tax authority’s retroactive interpretation of VAT regulations on claims dating back to 2015 is raising concerns over the viability of insurers and investment certainty in the sector.

This array of challenges highlights the complexity of the negotiations and the pressure faced by the administration led by Claudia Sheinbaum. With three months left on the extension, the Mexican government faces a task that goes beyond short-term politics: striking a balance between external demands, regulatory sovereignty, and domestic economic needs. Resolving these issues will be key to strengthening the bilateral relationship and ensuring the stability of the supply chains linking Mexico with North America.

All in all, meeting the goal of removing non-tariff barriers represents a far-reaching structural challenge for Mexico. The government’s ability to respond quickly, transparently, and with effective regulatory adaptation will be crucial to maintain privileged access to the U.S. market and to mitigate the risk of unprecedented protectionist measures in recent decades.