After complex negotiations, the U.S.-Mexico-Canada Agreement (USMCA) is likely to be extended with stricter rules of origin and higher labor requirements that will make North American supply chains less competitive, but Canada and Mexico will maintain a competitive edge that will help drive investments in the long term, should they retain preferential access to the U.S. market. Washington, Mexico City and Ottawa must decide by July 1, 2026, whether to extend the USMCA for a 16-year term or enter into yearly reviews over the next 10 years (the so-called sunset mechanism). The USMCA was signed on Nov. 30, 2018, after more than a year of negotiations during U.S. President Donald Trump's first term. It entered into force on July 1, 2020. The agreement's primary goal was to modernize trade rules and address long-standing grievances, especially around labor rules, digital trade and intellectual property.