Blab Business
Mexicos Tech Sector Confirms Digital Trade Rules Remain Intact Amid USMCA Review
Mexico’s technology industry has reassured stakeholders that the ongoing review of the United States–Mexico–Canada Agreement (USMCA) is unlikely to alter its digital trade framework. Industry leaders, including Sofía Pérez, CEO of the Mexican Information Technology Industry Association (AMITI), highlighted that negotiations have concentrated on industrial matters such as automotive rules of origin and steel and aluminum tariffs, leaving Chapter 19 – which governs cross‑border data flows, cloud services and digital commerce – untouched.
The USMCA entered into force on July 1 2020 and is set to expire on July 1 2036 unless the three partners agree to a new extension. On July 1 2026, the United States announced it would not renew the agreement, triggering an annual review process. While the decision has sparked debate about North American trade’s future, it has not changed the obligations that apply to technology companies operating across the region.
Chapter 19 remains in force. It permits businesses to transfer data across borders when required for their operations and bars governments from mandating data localization as a condition for providing digital services. The chapter also preserves duty‑free treatment for electronic transmissions between the United States, Canada and Mexico, giving cloud providers, fintech firms and other digital platforms legal certainty.
"There has not been any irritant. There has not been any comment from the United States about reopening Chapter 19," said Pérez. She added that the provisions supporting digital services across North America remain intact despite the broader uncertainty surrounding the treaty’s review.
The review has focused on industrial matters. The first bilateral meeting, held in Mexico City on May 28–29, concentrated on automotive rules of origin and U.S. tariffs on steel and aluminum. The second round, held in Washington on June 15–17, produced an agreement to establish a committee reviewing the implementation of Chapter 12, which covers technical regulations affecting specific industries. Neither round included proposals to modify digital trade rules.
According to AMITI, all three governments have incentives to avoid formally reopening the treaty because any amendment would require domestic legal approval processes in each country. In Mexico, changes would need Senate approval, while legislative procedures in the United States and Canada would depend on the scope of the modifications.
The next bilateral meeting is scheduled for the week of July 20 in Mexico City. In the meantime, Mexico’s Ministry of Economy reported that the number of issues raised by the United States during the review process fell from 54 to 14 ahead of the next round of technical discussions.
Mexico’s digital economy is growing rapidly. INEGI data show that the country’s e‑commerce sector generated MX$2.3 trillion in gross value added in 2024, representing 6.9 % of national GDP. The sector’s expansion underscores the importance of maintaining predictable rules for digital trade and cloud‑based business operations.
While digital trade provisions remain unchanged, emerging technologies such as artificial intelligence are expected to follow a separate regulatory path. When the USMCA entered into force in 2020, its digital chapter did not include provisions specifically addressing AI. Mexico is developing domestic legislation aimed at preventing the misuse of AI systems, while the United States continues to rely on a sector‑specific regulatory approach.
The stability of Chapter 19 comes at a time when the USMCA review has become a strategic framework for North America’s technological integration. The agreement establishes common rules for digital services, telecommunications, intellectual property and cloud infrastructure while supporting regional supply chains.
For now, the technology sector sees little reason to expect disruptions to the digital economy. As governments continue negotiating industrial priorities, companies operating across North America retain the legal framework that enables cross‑border data transfers, cloud services and digital commerce.
The current situation remains that the USMCA is in force through 2036, with annual reviews scheduled. The next bilateral meeting will take place in Mexico City in late July, and no changes to Chapter 19 have been proposed. The technology industry will monitor the review for any future developments that could affect digital trade rules.
The USMCA entered into force on July 1 2020 and is set to expire on July 1 2036 unless the three partners agree to a new extension. On July 1 2026, the United States announced it would not renew the agreement, triggering an annual review process. While the decision has sparked debate about North American trade’s future, it has not changed the obligations that apply to technology companies operating across the region.
Chapter 19 remains in force. It permits businesses to transfer data across borders when required for their operations and bars governments from mandating data localization as a condition for providing digital services. The chapter also preserves duty‑free treatment for electronic transmissions between the United States, Canada and Mexico, giving cloud providers, fintech firms and other digital platforms legal certainty.
"There has not been any irritant. There has not been any comment from the United States about reopening Chapter 19," said Pérez. She added that the provisions supporting digital services across North America remain intact despite the broader uncertainty surrounding the treaty’s review.
The review has focused on industrial matters. The first bilateral meeting, held in Mexico City on May 28–29, concentrated on automotive rules of origin and U.S. tariffs on steel and aluminum. The second round, held in Washington on June 15–17, produced an agreement to establish a committee reviewing the implementation of Chapter 12, which covers technical regulations affecting specific industries. Neither round included proposals to modify digital trade rules.
According to AMITI, all three governments have incentives to avoid formally reopening the treaty because any amendment would require domestic legal approval processes in each country. In Mexico, changes would need Senate approval, while legislative procedures in the United States and Canada would depend on the scope of the modifications.
The next bilateral meeting is scheduled for the week of July 20 in Mexico City. In the meantime, Mexico’s Ministry of Economy reported that the number of issues raised by the United States during the review process fell from 54 to 14 ahead of the next round of technical discussions.
Mexico’s digital economy is growing rapidly. INEGI data show that the country’s e‑commerce sector generated MX$2.3 trillion in gross value added in 2024, representing 6.9 % of national GDP. The sector’s expansion underscores the importance of maintaining predictable rules for digital trade and cloud‑based business operations.
While digital trade provisions remain unchanged, emerging technologies such as artificial intelligence are expected to follow a separate regulatory path. When the USMCA entered into force in 2020, its digital chapter did not include provisions specifically addressing AI. Mexico is developing domestic legislation aimed at preventing the misuse of AI systems, while the United States continues to rely on a sector‑specific regulatory approach.
The stability of Chapter 19 comes at a time when the USMCA review has become a strategic framework for North America’s technological integration. The agreement establishes common rules for digital services, telecommunications, intellectual property and cloud infrastructure while supporting regional supply chains.
For now, the technology sector sees little reason to expect disruptions to the digital economy. As governments continue negotiating industrial priorities, companies operating across North America retain the legal framework that enables cross‑border data transfers, cloud services and digital commerce.
The current situation remains that the USMCA is in force through 2036, with annual reviews scheduled. The next bilateral meeting will take place in Mexico City in late July, and no changes to Chapter 19 have been proposed. The technology industry will monitor the review for any future developments that could affect digital trade rules.
