Trump Seizes Chance to Strengthen Trade Protections Under USMCA

President Donald Trump is presented with a significant opportunity to enhance trade protections as the United States prepares for a review of the United States-Mexico-Canada Agreement (USMCA). This review, scheduled for the coming months, allows the administration to address key issues surrounding intellectual property (IP) protections that were diminished during the deal’s negotiation.

During his initial term, President Trump aimed to modernize trade relations with Canada and Mexico, shifting away from the North American Free Trade Agreement (NAFTA) to create a more equitable framework for American workers and businesses. As the former deputy U.S. trade representative, I witnessed firsthand the intent behind these negotiations: to secure stronger IP protections that would foster innovation and investment by granting creators exclusive rights to their work.

However, significant protections were eliminated before the USMCA took effect. House Democrats led efforts to remove provisions that would have granted a decade of regulatory data protection for new medicines. This provision would have safeguarded sensitive information shared by drug developers with regulatory authorities, ensuring that American companies could recoup their investments in research and development.

The removal of these protections has allowed Canadian and Mexican firms to replicate U.S.-made drugs more easily, undermining the financial viability of American pharmaceutical companies. In fact, the current landscape has made it increasingly challenging for these companies to justify the high costs associated with bringing new drugs to market.

The Special 301 Report from the U.S. Trade Representative’s office highlights ongoing concerns regarding IP violations in Mexico, which has been placed on the Priority Watch List due to significant issues with counterfeiting and piracy. The report emphasizes that Mexico has not fulfilled its obligations under the USMCA, particularly in terms of protections related to pharmaceutical patents.

Similarly, Canada has its shortcomings. It has also been listed on the Special 301 Watch List, where it has implemented restrictive rules regarding patent term restoration, limiting the number of drugs eligible for protection. Furthermore, Canada’s imposition of drug price controls devalues American-made medicines, exacerbating the challenges faced by U.S. companies and ultimately increasing costs for American patients.

To rectify these issues, President Trump has the opportunity to advocate for straightforward reforms during the upcoming USMCA review. This includes establishing enforceable standards that mandate respect for IP rights, clarifying legal ambiguities, and restoring the originally negotiated 10-year regulatory data protection standard.

Moreover, it is essential to require Canada to abandon its price controls and increase its investment in drug development. Ensuring compliance with existing obligations, such as patent term restoration, will also be crucial in safeguarding American innovator interests.

President Trump previously emphasized the need for Canada and Mexico to elevate their IP standards to align with those of the United States. Failing to defend IP rights, even in specialized areas like drug regulation, can signal a lack of commitment and invite further encroachments on these essential rights.

As the review of the USMCA approaches, the Trump administration has a vital chance to address these longstanding issues. For the benefit of American workers and innovators, it is imperative that this opportunity is not squandered.

Ambassador Jeffrey Gerrish served as the deputy U.S. trade representative for Asia, Europe, the Middle East, and industrial competitiveness from 2018 to 2020. The views expressed in this article are his own.