USMCA: Canada’s business community turns up the heat over energy, lithium, and canola, and Mexico heads into the review under greater pressure
Canadian demands point to a USMCA review more focused on regulatory certainty and rules of origin as North America’s industrial landscape is reshuffled.
The USMCA review is starting to take shape with clear signals from Canada’s private sector: business groups in western Canada, such as the Calgary Chamber of Commerce and the Business Council of Alberta, have placed Mexico at the center of their regional competitiveness agenda. Their diagnosis blends two ideas: Mexico is an increasingly important link in North American supply chains—driven by nearshoring and by the rethinking of sourcing after global shocks—but at the same time, its public-policy decisions in energy, mining, and agriculture are creating frictions that could harden the trade negotiations.
The backdrop is a structural shift in the regional playing field. The United States and Canada are looking to strengthen supply chains in strategic sectors (energy, critical minerals, and agribusiness) with less dependence on Asia, while Mexico competes for more manufacturing investment, particularly in autos, electronics, home appliances, and medical devices. That repositioning raises Mexico’s value to its partners, but it also increases scrutiny of its regulatory framework, enforcement of the agreement’s rules, and the predictability investors need.
The numbers show the Mexico–Canada relationship still has room to grow: trade between them is far smaller than flows with the United States. However, as value chains become more integrated (from auto parts to processed foods), any regulatory restriction or non-tariff barrier tends to get amplified and becomes a regional competitiveness issue—not just a bilateral trade matter.
Energy: the “level playing field” debate and the cost of uncertainty
The Canadian business community’s main warning light is the energy sector. The concern isn’t limited to the state’s role, but rather the argument that prioritizing state-owned companies—especially Pemex—shrinks the space for private capital and makes it harder to plan long-term investments. In an environment where reliable, cleaner electricity is a prerequisite for capturing nearshoring, regulatory certainty around generation, interconnection, permitting, and market rules becomes an economic factor, not an ideological one.
For Alberta-based companies with experience in hydrocarbons and low-emissions technologies, Mexico’s appeal lies in its industrial demand potential and its role as a manufacturing platform. But they also note that the USMCA’s limitations on certain energy dispute-settlement mechanisms increase perceived risk. That matters at a time when Mexico faces investment challenges in power infrastructure, transmission, and natural gas availability for industries looking to locate close to the U.S. market.
In the short term, the conversation intersects with Pemex’s fiscal and operational reality. The oil company carries high investment needs and significant financing costs; at the same time, the Mexican government has reiterated its intention to adjust support in the coming years. For investors, the issue isn’t only the size of support, but how clear the roadmap will be on rules, partnerships, and permits to expand energy capacity and reduce bottlenecks. If the USMCA review pushes toward greater clarity, Mexico could turn pressure into an opportunity to attract projects tied to industrial efficiency, carbon capture, hydrogen, and infrastructure modernization—so long as incentives and regulations are designed consistently.
The second front is mining, with an emphasis on critical minerals for batteries and high-value industrial supply chains. From Canada, the argument is that North America needs to integrate supplies of strategic inputs for electric vehicles, storage systems, and advanced technologies, and that Mexico’s “state control” of lithium limits that integration. Added to this is concern that Chinese-origin companies could use subsidiaries or structures in Mexico to enter the regional market, which would increase pressure for tighter rules of origin and stricter compliance oversight.
For Mexico, this debate arrives at a key moment: mining investment depends on permits, legal certainty, and security conditions, as well as access to energy and water. Even with its geological advantage and proximity to the United States, competition for mining capital is global, and Canada is one of the most influential players in sector financing and standards. Any tension within the USMCA can translate into more litigation, greater caution on new projects, or additional traceability requirements—affecting regional employment, tax revenue, and industrial linkages.
The third front is agrifood, with canola as an emblematic case. Business organizations in Alberta and Calgary are challenging Mexican restrictions on imports of genetically modified canola, arguing they are a non-tariff barrier that runs counter to the spirit of the agreement and to the idea of decisions grounded in scientific evidence. In practical terms, the issue touches a sensitive USMCA point: how regulatory differences across health, the environment, and trade are resolved without blocking flows of key inputs for the food industry.
In Mexico, the agrifood debate often intersects with food sovereignty policies, sanitary standards, and consumer preferences. Still, in a context where food inflation is more moderate than at recent peaks but remains meaningful for purchasing power, any restriction that raises input costs or reduces supply tends to show up in higher costs for supply chains and consumers. How this disagreement is handled—through panels, technical adjustments, or equivalency mechanisms—will set a precedent for the scope of regulatory measures and their compatibility with the USMCA.
Looking toward the review, the reading from Canada suggests a tougher agenda: regulatory certainty in energy, greater openness and traceability in critical minerals, and discipline against non-tariff barriers in agriculture. For Mexico, the challenge will be to defend its policy space without losing investment appeal and without weakening its role as a regional industrial platform. The negotiation, more than an isolated clash, appears to foreshadow a resetting of rules for the next phase of economic integration in North America.
In perspective, the central point is that Mexico enters the USMCA review with greater manufacturing weight and greater exposure: the same integration that attracts investment also raises the cost of uncertainty. A response that combines regulatory clarity, compliance, and energy capacity can turn pressure into a competitive advantage; otherwise, the country will face more friction in strategic sectors.
