Canada Proposes 16-Year Renewal of Trade Pact, Seeks Tariff Talks

Canada has written to the United States and Mexico with its recommendations to renew a trilateral trade agreement for 16 years while seeking parallel talks on sectoral tariffs before a meeting between Canadian and US trade negotiators later in the day.

Canada’s minister responsible for Canada-US trade, Dominic LeBlanc, outlined his suggestions in a letter on Tuesday. He is due to meet US Trade Representative Jamieson Greer later in the day, after Canada was left out of bilateral trade talks between the US and Mexico last week. The country’s chief trade negotiator to the US, Janice Charette, will accompany him.

“The Joint Review process provides us an opportunity to review the Agreement to assess whether there are ways to strengthen it and consider where improvements may be warranted to keep up with evolving economic conditions,” the letter said.

The letter also noted that, in parallel with reviewing the United States-Mexico-Canada Agreement (USMCA), addressing sectoral tariffs will be essential.

The US imposed tariffs on steel, aluminium, and cars that have hurt Canada’s economy.

Canada criticised for slowness

This will be LeBlanc’s second meeting with Greer after their first meeting in March, although they have spoken occasionally over the phone, including last week, the government has said.

Businesses have criticised Canada for being slow to begin the USMCA review process — which must officially be completed by July 1 — while Mexico has been more proactively engaging with the US administration.

Trump suspended all talks with Canada late last year after the province of Ontario aired an advertisement featuring former President Ronald Reagan warning that tariffs lead to trade wars.

“In terms of the discussions with the US, there is a series of technical issues that they have with Mexico, they have with us, which is why there is a bifurcated discussion,” Prime Minister Mark Carney told reporters on Tuesday.

During a speech in New York last week, Carney said a stronger Canadian economy would support growth in the US, too.

“Canada Strong will help make America great again,” he said, earning rare praise from the US ambassador to Canada.

The US and Mexico concluded their first round of bilateral talks on revising the USMCA last week, discussing automotive rules of origin, steel and aluminium trade, and economic security, the US Trade Representative’s office said.

If all three countries do not agree to extend it, the pact would move to annual reviews until 2036.

Greer has indicated Canada may have to accept some tariffs if it wants to engage with the US on reviewing the agreement.

Greer has also said the revised deal should include stricter automotive rules of origin and provide greater access to Canadian markets for US businesses, such as in dairy.

Restrictions on liquor sales from Canadian provinces have also been a source of friction with the US administration.