Canada-United States-Mexico trade pact enters annual reviews, after U.S. declines renewal
OTTAWA — Canada’s three-way trade pact with the United States and Mexico will undergo annual reviews after the U.S. declined Wednesday to agree to a 16-year extension of the deal in its “current form.”
The statement released by U.S. Trade Representative Jamieson Greer came after the first trilateral call among the three countries held on the July 1 deadline for their decision on whether to renew the deal.
“The United States did not agree to renew the (United States-Mexico-Canada Agreement) in its current form. As a result, the (agreement) is not renewed,” Greer said in a statement.
“The United States will continue to engage with Mexico and Canada to address the agreement’s shortcomings and our trade deficits with these countries.”
Intergovernmental Affairs Minister Dominic LeBlanc, who serves as the minister responsible for Canada-U.S. relations, attended Wednesday’s virtual hour-long meeting with his American and Mexican counterparts alongside Janice Charette, Canada’s chief trade negotiator with the U.S. He said trade talks would continue.
“We agreed on the importance of continuing our discussions and identifying ways to ensure trade and investment frameworks between Canada, the United States and Mexico continue to support North American prosperity and competitiveness,” LeBlanc said in a statement.
“For Canada, this includes substantive discussions with the United States on addressing sectoral tariffs on Canadian steel, aluminum, autos and lumber.”
A source with knowledge of how the meeting went said it followed a structured agenda and struck a friendly tone, including some chatter about the World Cup.
The source said LeBlanc and Marcelo Ebrard, Mexico’s economy secretary, raised the U.S.’s sectoral tariffs but also discussed opportunities to collaborate with the U.S.
Future talks are expected to continue on a bilateral basis, but LeBlanc stressed the need for trilateral discussions as well, the source said.
While both Canada and Mexico each entered Wednesday’s discussion having said they wanted to renew the free trade deal for another 16-year term, it was widely known that U.S. President Donald Trump’s administration did not, as Trump has repeatedly talked down the likelihood of him agreeing to an extension.
When he signed the agreement in 2020, Trump called it the best and most important trade deal ever made.
With the U.S. declining to renew the deal, it means the agreement will now enter a period of annual reviews until it expires in 2036.
Until then, the deal remains in effect as is and can be renewed at any time for another 16-year term — an option that LeBlanc highlighted in his statement.
“Canada approaches these discussions from a position of strength and with the goal of preserving and strengthening one of the most successful trading relationships in the world,” he said.
Prime Minister Mark Carney had downplayed the prospect of seeing any kind of breakthrough during Wednesday’s trilateral call, the first held among the countries.
Speaking in northern Quebec the day before, he told reporters that he “wouldn’t expect any drama,” from the call, while adding that “I’m not looking for my pen.”
Putting pen to paper on a deal that would see Trump agree to extend the trade pact as well as remove or reduce tariffs on Canadian goods like steel and aluminum has been an elusive goal for Carney, who came to office last year on a promise of striking a deal with the unpredictable president.
The Opposition Conservatives have so far accused Carney of failing to deliver. Calgary MP Shuv Majumdar, who serves as the party’s critic on Canada-U.S. relations in Parliament, took to X to point out how Greer in his statement on Wednesday said the U.S. will meet Mexico later this month for its third round of bilateral negotiations related to the deal.
“Millions of Canadians are out of work, anxious for their future, living in uncertainty around how to price things, plan things and grow businesses,” he wrote. “Yet still Canada still isn’t at the table?”
Carney and other Canadian lawmakers have spent the past few months playing down the impact of a failure to renew the deal, despite concerns over the effect the uncertainty will have on the country’s economy and businesses. Speaking before a crowd in April, Charette likened the July 1 deadline as being more of “checkpoint” than a “cliff.”
But lengthy negotiations could prompt companies to hold off on potential investments. Lobbying groups including the U.S. Chamber of Commerce and the Business Roundtable have pushed for governments to strengthen the pact.
“Supply chains are built with 30-year visibility, not five, and uncertainty could dissuade investment and growth,” Madeline Chalecki, assistant director of the Atlantic Council’s GeoEconomics Center, wrote in an online post this week.
Among the top trade irritants that Greer has named is Canada’s ban on American booze, a move made early last year by several premiers in the wake of Trump hitting Canada with tariffs.
The U.S. has also complained about Canada’s digital policies, such as the Online Streaming Act, as well as the renewed federal push under Carney to source more materials from Canadian suppliers.
Speaking to reporters last week, Carney, who confirmed that in his most recent conversation with Trump CUSMA did not come up, repeated his often used statement that he could strike a deal with the president at anytime, but that he was focused on securing a good one.
“We’re not going to sign a bad deal, so it has to be a real deal,” Carney said last week.
National Post, with files from Tracy Moran and Bloomberg
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