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The administration of US President Donald Trump chose not to extend their trade agreement with Canada and Mexico, sparking negotiations that are expected to be difficult about amending this agreement.
The announcement by US Trade Representative Jamieson Greer followed a virtual meeting on Wednesday with Canada-US Trade Minister Dominic LeBlanc and Mexico’s economic secretary, Marcelo Ebrard.
The US announcement does not kill CUSMA, which does not expire until 2036.
Wednesday was the deadline set in the text of the agreement for each country to announce that it wants to extend it until 2042 or renegotiate its terms.
The US move has been eagerly awaited, although the Trump administration has not yet made it official.
Mexico and Canada have previously said they want CUSMA to be extended, and are willing to discuss amendments.
Prime Minister Mark Carney says he doesn’t expect ‘any drama’ at the first trilateral CUSMA review meeting set for July 1. ‘We expect a constructive exchange,’ Carney said of the planned meeting between Canadian, American and Mexican trade representatives.
Trump signed the deal during his first term and hailed it at the time as historic. In recent weeks, he has often disparaged CUSMA but stopped short of threatening to abolish it.
Any country can withdraw from the agreement – known as the USMCA south of the border – with six months’ notice.
US will ‘continue to engage’ with Canada, Mexico
“The United States has not agreed to renew the USMCA in its current form,” Greer said in a statement. “The United States will continue to negotiate with Mexico and Canada to resolve the issues of the agreement and our trade deficit with these countries.”
In a conference call with reporters, a senior Trump administration official said the president has the right to withdraw from the agreement.
LeBlanc said the three countries agreed Wednesday on the importance of continuing their talks.
“For Canada, this includes important negotiations with the United States on addressing tariffs on Canadian steel, aluminum, auto and lumber industries,” LeBlanc said in a statement.
Mexican President Claudia Sheinbaum downplayed the importance of Wednesday’s deadline, saying the three countries could agree to an extension at any time in the next decade.
“The joint work continues – it’s not like everything ends today,” Sheinbaum said Wednesday at his daily news conference in Mexico City, before the US decision was announced.
“If in five months or three years the parties say, ‘We can add another 16 years,’ it can be extended,” he added.
There are no dates for the next Canada-US talks
Mexico has a third official round of talks with the US scheduled for the week of July 20.
Neither LeBlanc nor Greer indicated when the negotiating teams from Canada and the US would meet next.
A senior Trump administration official briefed reporters explained the differences in approach between Mexico and Canada.
“Mexico, although we have many challenges in our relationship, including trade, they understand the administration’s tax policies. In many ways they are building on this,” said the official, who spoke on condition of anonymity.
“Canada is in a different situation,” the official said, and accused Ottawa of not addressing the “numerous non-tariff barriers and trade challenges” raised by the US.
