As deadline to formally extend CUSMA nears, here’s what to know
A major benchmark is coming up for the Canada-U.S.-Mexico Agreement on trade, known in Canada as CUSMA.
July 1 is the deadline for the three countries to either formally extend the agreement for 16 years or continue under annual reviews.
Here’s what you need to know about the mandatory review:
Canada and Mexico sent letters to Washington recently indicating that both want to extend the agreement for 16 years to 2042.
The Trump administration has not publicly stated its intention but signals from U.S. President Donald Trump and other officials have strongly suggested the United States will blow past the deadline.
Trump said earlier this month that he is “not looking to renew” the agreement.
Greta Peisch, the former general counsel for the Office of the U.S. Trade Representative, said the Trump administration is expected to refrain from agreeing to extend CUSMA in July.
“If that is the case, the parties will discuss what changes could be made to address concerns about the operation of the agreement,” Peisch, a partner at Wiley Rein in Washington, D.C., said in an email.
“The parties have already started this conversation, particularly between Mexico and Canada.”
The trade pact will remain in place even if the United States doesn’t agree to extend CUSMA on July 1.
Peisch said CUSMA will continue for another 10 years before “automatically terminating if the parties can’t come to agreement on extension.”
In the near term, Peisch said, the countries will continue to negotiate possible changes to the agreement that could lead to an extension.
Negotiations between Mexico and the United States have launched but Ottawa and Washington have not started official talks yet.
Canada-U.S. Trade Minister Dominic LeBlanc has met recently with United States Trade Representative Jamieson Greer in Washington and on the sidelines of the G7 in France.
The three countries will continue to talk until they either agree to extend the deal or let it expire in 2036.
If the United States does not agree to the extension on July 1, the trade agreement stays in place unless one of the countries gives six months’ notice that it is pulling out of CUSMA.
Canada and Mexico both have indicated they want to keep the trilateral deal in place.
Trump has rattled the agreement’s future by calling it “irrelevant.” He also has said it may have served its purpose.
Greer has said both that he’d be open to two separate bilateral agreements and that there are “pillars” of the continental trade pact that work well.
Given how integrated many industries are in North America, most experts do not think the United States would be quick to leave the agreement.
Many business, agriculture and lobby groups have told Congress that CUSMA is important to their industries while also calling for some changes to the trade pact.
CUSMA was negotiated during the first Trump administration to replace the North American Free Trade Agreement. It was approved by Congress — which has authority over trade agreements — with strong bipartisan support.
But Peisch said the Trump administration may take the position that modifications to CUSMA don’t require a change to U.S. law and therefore don’t need to be approved by Congress.
“The (CUSMA) implementing bill contains procedures for making many changes to tariffs and rules of origin, and many other provisions could be amended without impacting U.S. law,” Peisch said.
Prime Minister Mark Carney has said that the Trump administration has made it clear it doesn’t want to bring the agreement to a vote in Congress by changing the “fundamental architecture” of the trade pact.
globalnews
