US Declines to Renew USMCA Trade Pact with Canada and Mexico

The United States will not agree to renew its trade pact with Canada and Mexico just yet, US Trade Representative Jamieson Greer has announced.

“The United States did not agree to renew the USMCA in its current form,” Greer said in a statement. “As a result, the USMCA is not renewed. The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries.”

Mexico’s Economy Minister Marcelo Ebrard confirmed in a video on X that the US opted not to extend USMCA.

The trade agreement between the three countries was up for its first joint mandatory review on Wednesday, under the framework set during US President Trump’s first term.

USMCA came into effect on July 1, 2020, and is slated to expire in 2036.

Mexico and Canada are two of the US’s largest trading partners. Until recently, Canada sent nearly 80 percent of its exports to the US.

The US feels that the trade agreement did not adequately lower US trade deficits with its North American neighbours, the Reuters news agency reported on Wednesday, citing an unnamed senior Trump administration official.

The official said the administration was not interested in prolonging negotiations with Mexico and Canada, and that “we need to come to a conclusion as quickly as possible.”

‘No real advantage’

Trump has repeatedly stated he wishes USMCA did not exist, saying in January that there was “no real advantage to it; it’s irrelevant.”

“I don’t know that I’m going to renew it,” he said on June 10, before signalling he is open to negotiation with the deal’s other parties. “We’re talking to them. We’ll see if we do something.”

A week later, Trump voiced further ambiguity about the US stance. “I would rather not have the agreement, but I may sign it,” he said during his visit to Paris.

If all three countries fail to commit to an extension, it triggers an annual review process, which would put the USMCA up for debate every year until 2036. Despite the US announcement on Wednesday, USMCA remains in force until it expires in 10 years.

“The most likely scenario is that it will go into an annual renewal process,” Vina Nadjibulla, vice president and head of research at the Asia Pacific Foundation of Canada, a nonprofit think tank, told Al Jazeera.

Following the US statement, Dominic LeBlanc, minister of internal trade of Canada, said the three countries agreed “on the importance of continuing our discussions and identifying ways to ensure trade and investment frameworks”.

LeBlanc reiterated Canada’s support for the agreement. In early June, LeBlanc recommended the deal be renewed for 16 years.

The US plans to meet with Mexico the week of July 20 to discuss renewing the trade pact.