How the U.S. trade agreement with Mexico and Canada can advance cybersecurity and defend critical infrastructure

The United States-Mexico-Canada Agreement (USMCA) review is the United States’ best opportunity to advance secure digital infrastructure and influence technological markets in Northern and Latin America. 

On Dec. 3-5, the United States Trade Representative held a public hearing on the future of the landmark 2018 free trade accord that enumerated America’s regional agenda for the first time since 1994. Across a series of panels, experts in foreign policy, trade and security made the case for the importance of digital trade – largely focusing on the importance of digital markets to America’s economic growth and the need to update Section 19’s digital rules to reflect current markets. However, the cybersecurity component of digital trade was seldom mentioned.

Notably, the USMCA was among the first trade agreements to recognize cybersecurity, an approach to digital trade now widely emulated in trade agreements worldwide. This success reflected a clear understanding that securing the digital economy is central to modern trade. As digital infrastructure and services continue to expand into one of the fastest-growing markets in the Americas, the United States must do even more to strengthen cooperation on cybersecurity and digital trade to sustain and build upon that early momentum.

An evolving world shaped by shifting trade patterns, rising geopolitical tensions and new economic priorities requires a new approach to trade relations in Latin America, one reflective of commerce, development and security in the digital age. Rather than let the USMCA continue in its current state before it is scheduled to lapse in 2036, United States officials should advance a new trade agenda for the Western Hemisphere, starting with two of the largest and most interdependent trade relationships: Mexico and Canada.

The original USMCA negotiation was significant because it first included guardrails for digital trade and e-commerce, including rules to allow cross-border data flow and limit data localization. Today, America’s economic future once again necessitates a more targeted approach to digital security.

The importance of digital goods and services to the trade relationship between the United States and Mexico has grown significantly since the USMCA was first negotiated. The U.S. trade balance in digital services has increased by 92% since 2018, representing a surplus of over $114 billion in 2024. Exports of key digital infrastructure, including computers and telecommunications equipment, have increased by 26% in the same timeframe, but America’s deficit in these key components of digital infrastructure has skyrocketed by 48% — representing $192 billion in 2024.

The U.S. should use the USMCA to take a critical first step toward establishing trade rules that position American firms for success in this changing economy, securing continued access for digital services exports and increasing the viability of digital infrastructure exports.

Despite political willpower and investment, America’s AI and technology leadership has not immediately translated into market opportunities in neighboring countries. The USMCA can set a precedent for trade deals with the rest of Latin America that open up new markets to U.S. technology companies, give America a stronger governance voice over the key infrastructure security debates in the region, and counter anticompetitive practices and market forces that have allowed adversaries such as China to wield outsized economic influence in regional policy forums.

One of the best known examples of this growing influence is the immense commercial success of Chinese telecommunications vendors in Latin America. Investment programs such as the Digital Silk Road have further cemented China’s commercial footprint throughout technology stacks in America’s backyard. Rather than face another decade playing catch-up with Chinese firms leaning on unfair trade practices, the U.S. can lay out new trade frameworks that level the playing field for critical digital and technology exports in the region. 

As the relationship among the three parties evolves, it is important to place it within the broader global movement toward digital sovereignty. In the United States, recent diplomatic efforts have increasingly focused on advancing economic and security interests – largely through bilateral pressure. However, a multilateral cornerstone trade agreement like the USMCA can uniquely support America’s trade and security priorities.

In contrast to the European Union’s tightly regulated markets and China’s export-driven efforts to shape global governance, America’s market-driven, innovation-first model relies heavily on private-sector success to sustain American technological dominance. The U.S. AI Action Plan illustrates this approach; it extends beyond domestic innovation policy into the realm of international standard-setting, with AI security, interoperability and infrastructure development at its core. America’s trade negotiations must reflect these priorities and open new markets or risk falling behind other great powers in the competition to produce and govern digital infrastructure.

The U.S. should push Canada and Mexico to establish a shared cybersecurity baseline grounded in recognized national or international standards, such as the NIST Cybersecurity Framework (CSF), in order to advance cooperation on data flows, supply chain security and related issues. Adopting the CSF or similar best practices would promote regulatory and policy alignment across North America, fostering harmonization and simplifying compliance for companies operating regionally. Streamlined regulatory frameworks not only reduce administrative burdens but also enhance supply chain resilience, ensuring that digital goods produced in any of the three countries meet shared security expectations. To sustain this alignment, governments should actively engage sectoral regulators and industry associations to establish consistent implementation and broad-based compliance. By using the USMCA to advance its normative influence over digital regulation, the United States can reassert influence over technology standards and limit security risks posed by adversary-developed technology stacks.

Another opportunity for the U.S. to make significant progress toward a more secure trade relationship with Canada and Mexico is through increased law enforcement cooperation on cybercrime and digital commerce. The U.S. Department of Homeland Security and Department of Justice already aggressively investigate and prosecute cyber criminals responsible for reported annual losses exceeding $16 billion. But current policy doesn’t go far enough: Cybercriminals can commit fraud, disrupt business operations and target critical infrastructure from anywhere. A robust, uniform governance and law enforcement framework is the best way to increase pressure on, and ultimately disrupt, these complex criminal networks, and the U.S. can use the USMCA renegotiation process to pressure Canada and Mexico to cooperatively identify and prosecute cybercriminals. 

To safeguard critical infrastructure and maintain trust in the digital economy, governments must also adapt their strategies to the realities of the modern cyber threat environment. America’s adversaries are adopting more sophisticated tactics, such as China’s series of “Typhoon” campaigns against several sectors of critical infrastructure, that emphasize prepositioning and operational disruption over short-term extortion. This evolving threat environment has led the Trump administration and its allies to reevaluate the primarily defensive role of cybersecurity within U.S. foreign policy.

The United States has an opportunity to shape Latin American trade and security policy by taking a leadership role in negotiations and emphasizing issues that provide mutual benefits across the region. Yet, this moment also carries the risk of losing influence. Both Mexico and Canada are preparing for a potential decline in U.S. trade engagement, having recently signed an agreement to promote and strengthen economic and security ties with each other. The time to advance American interests is now; without a robust U.S. alternative, the region is prepared to move on in favor of multilateral deals with the EU or China.

Rather than abandoning multilateral trade agreements, the U.S. should use them to reestablish and enforce the rules-based trade order necessary to open new technology markets and secure digital infrastructure. Renegotiation of the USCMA is the best vehicle to advance cybersecurity cooperation, defend the sovereignty of critical infrastructure from foreign interference and open new digital markets to American firms.

The views expressed in this article are solely those of the authors and do not necessarily reflect those of their employers.