President Donald Trump has rejected extending the United States-Mexico-Canada Agreement (USMCA, or CUSMA as it’s been called in Canada). While it doesn’t cancel the current deal, the result means an annual review process.
The decision by the U.S. not to extend the agreement came after a virtual meeting between representatives of the three countries on Wednesday, the day of the deadline for all three to signal their intentions about the continental trade pact.
Canada and Mexico had both said publicly they wanted to extend the agreement for sixteen years. But in a statement, U.S. trade representative Jamieson Greer says Washington does not agree. He did say the U.S. will continue to engage with Mexico and Canada to address the agreement’s short comings and trade deficits.
“There’s a possibility for it to come together. But I think it’s more likely that the discussions will continue beyond the midterms and possibly even into next year,” said Steve Verheul, Canada’s former chief negotiator on the original USMCA.
Prime Minister Mark Carney had already indicated he did not expect the extension. For now, it means the uncertainty and feeling of insecurity will continue, but government affairs lawyer and trade specialist Jacques Shore is still optimistic.
“It’s hard really to predict when we will have the certainty that I think we absolutely need for this updated CUSMA,” he said. “But I truly do believe that there’s every reason why, at the end of the day, it’ll be smart economic sense, it’ll be the right thing to do for our economies and I think that we will continue to grow well together.”
With Washington’s refusal, the free trade agreement remains fully in force until 2036, but an annual review process has been triggered for the next ten years.
Canada’s trade minister Dominic LeBlanc and chief negotiator Janice Charett have tried to downplay any concerns about Wednesday’s decision.
