US Expected to Let Trade Pact Clock Start, Not Extend USMCA

US President Donald Trump’s administration is expected to formally declare on Wednesday that it will not extend the US-Mexico-Canada Agreement on trade, starting a decade-long clock to wind down the 32-year-old North American free-trade zone as the three countries haggle over proposed changes.

That declaration will kick off a six-year review session, part of a “sunset clause” negotiated by Trump’s first administration. However, it will do little to alter contentious negotiations over the pact’s future, including sweeping demands to boost US and regional content in North American automotive production and trade protections to block Chinese goods from benefiting ‌from USMCA.

Trade chiefs from the US, Mexico and Canada are expected to meet virtually on Wednesday and declare whether they want to extend the pact for another 16 years.

A spokeswoman for US Trade Representative Jamieson Greer said he has made no formal announcement of his intention towards USMCA. But Greer has already scheduled a third round of negotiations with Mexico for the week of July 20, signalling his intent to keep pushing for changes.

“We expect July 1st to come and go, and for the United States to not confirm its wish to extend,” said Greta Peisch, a former USTR general counsel who is now a trade partner at Wiley Rein in Washington.

Peisch added that it is unclear “whether the US says exactly what it’s looking for in a public way” in a statement expected after the meeting.