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Mexico鈥檚 newly elected president, Claudia Sheinbaum, will take office on October 1st. She鈥檒l have just a year and a half to prepare for what will likely be one of the most important international meetings of her tenure: the first joint review of the US-Mexico-Canada Agreement (USMCA) that鈥檚 slated for July 1st, 2026.

It鈥檚 an understatement to say that Sheinbaum needs the review to go well. Mexico鈥檚 trade to gross domestic product ratio is聽 and the country sends聽 of its exports to the US. Like her predecessor, Andres Manuel Lopez Obrador (AMLO), Sheinbaum has thus thrown her support behind USMCA, both to insulate Mexico from rising US protectionism, and to capitalize on Washington鈥檚 desire to 鈥渘ear-shore鈥� crucial supply chains.

The next US administration, however, is not going to rubber stamp USMCA simply because it wants to reduce trade with China and bring manufacturing closer to home. On the contrary, this review will take up questions about implementation and compliance, and the reality is that Mexico isn鈥檛 living up to some of its obligations under USMCA, notably on intellectual property (IP) rights.聽

聽As the United States Trade Representative (USTR) observes in its聽, while the AMLO Administration has pursued 鈥渟ignificant legislative reforms鈥� to comply with USMCA鈥檚 IP obligations, significant shortcomings, including the lack of implementing regulations, continue to create uncertainty for the creative and innovative sectors looking to protect and enforce IP in Mexico.

For example, when the USMCA entered into force on July 1, 2020, Mexico was immediately responsible for implementing an effective patent enforcement system which ensures that patent-infringing generic or biosimilar medicines do not receive marketing authorizations prior to the expiration of patents associated with the innovative products. Four years later, biopharmaceutical innovators are still waiting for Mexico to issue implementing regulations and come through on its patent enforcement commitments.

Likewise, Mexico has until next year to come into compliance with USMCA鈥檚 obligations on 鈥減atent term restoration鈥� (PTR) and 鈥渞egulatory data protection鈥� (RDP). Mexico is an outlier among many OECD countries by not granting PTR to compensate for lengthy delays with the regulatory review process. This takes many years off a patent鈥檚 20-year lifespan. Mexico has yet to issue implementing regulations to comply with this commitment.

RDP provides temporary protection for the comprehensive package of information biopharmaceutical innovators must submit to regulatory authorities to demonstrate the safety and efficacy of a medicine for marketing approval. This is particularly important for biologics, which may not be adequately protected by patents alone. To incentivize investments in these cutting-edge drugs, governments protect RDP. Innovators are still waiting for Mexico to issue federal legislation implementing regulations to provide RDP for all pharmaceutical products.

Sheinbaum will enjoy the political support needed to enact these and other IP reforms on Day 1. Her Morena party, along with coalition partners,聽 of seats in the Chamber of Deputies, and did nearly as well in Mexico鈥檚 Congress. Her messaging should draw attention to the results of a聽 by the European Union and IMPI that found that IP accounts for聽 of Mexico鈥檚 jobs.聽

Washington is already making it clear that it will press Mexico to comply with its IP obligations at the review. As Representative Greg Steube (R-FL) recently聽 to the House Ways and Means Committee, 鈥淢exico has yet to fully implement key commitments in the USMCA intellectual property chapter.鈥� USTR points to this and other concerns in keeping Mexico on its Special 301 鈥渨atch list鈥� of countries that are especially lax in protecting US IP.

On October 1st, Sheinbaum should begin the legislative process of enacting Mexico鈥檚 long-promised IP reforms to comply with USMCA. Anything shy of this will cast doubt on Mexico鈥檚 commitment to the trade pact, and its future as a trusted trade partner in US efforts at near-shoring.