US declines to renew North American trade pact in current form
Washington’s decision keeps USMCA in force but starts a more uncertain annual review process with Canada and Mexico.
By Lucas Ferreira · Science & Environment Writer
3 min read
The United States has declined for now to renew the USMCA trade agreement with Canada and Mexico, a move that keeps the pact alive but leaves its long-term future unsettled. US Trade Representative Jamieson Greer said Washington wants more talks on what it sees as flaws in the deal and on US trade deficits with its neighbors.
Greer said in a statement that the United States would not renew the agreement “in its current form,” and that, as a result, the pact had not been renewed. He said the US would keep working with Mexico and Canada on concerns over the agreement.
Mexico’s Economy Minister Marcelo Ebrard confirmed in a video posted on X that the US had chosen not to extend the pact. The decision came as the three countries reached the first required joint review of the agreement, which was created under the framework negotiated during US President Donald Trump’s first term.
Agreement remains in force
The USMCA took effect on July 1, 2020, replacing the North American Free Trade Agreement. Under its terms, the deal is scheduled to run until 2036 unless the parties take steps that change its course.
If all three governments do not agree to extend it, the agreement moves into an annual review process, according to Al Jazeera. That would put the pact back before the three countries each year until its scheduled expiry in 2036.
Despite the US decision, the agreement remains in effect. Vina Nadjibulla, vice president and head of research at the Asia Pacific Foundation of Canada, told Al Jazeera that the annual renewal process was the most likely outcome.
Canada and Mexico are among the United States’ largest trading partners. Al Jazeera reported that, until recently, nearly 80 percent of Canadian exports went to the US.
Trade deficits cited by US
Reuters reported, citing an unnamed senior Trump administration official, that the US believes the agreement has not done enough to reduce American trade deficits with Canada and Mexico. The official said the administration did not want talks with the two countries to drag on and wanted a quick conclusion.
Trump has repeatedly expressed doubts about the agreement. In January, he said there was “no real advantage” to the pact and called it “irrelevant,” according to Al Jazeera.
On June 10, Trump said he did not know whether he would renew the agreement, while also saying the US was talking with Canada and Mexico. A week later, during a visit to Paris, he said he would prefer not to have the agreement but might sign it, Al Jazeera reported.
Canada has continued to support extending the pact. Dominic LeBlanc, Canada’s minister of internal trade, said after the US statement that the three countries agreed on the need to continue discussions and identify ways to support trade and investment frameworks.
LeBlanc had earlier recommended renewing the agreement for 16 years, according to Al Jazeera. The United States plans to meet with Mexico during the week of July 20 to discuss renewal of the trade pact.
This story draws on original reporting from Al Jazeera.