U.S. hesitates to renew trade agreement with Canada, Mexico

The United States on Wednesday declined to renew a key trade agreement with Mexico and Canada, according to U.S. Trade Representative Jamieson Greer. Officials from the three countries met on Wednesday to review the terms of the United States-Mexico-Canada, or USMCA, Trade Agreement. The United States was not ready to extend the agreement further in its current form, Greer said.

According to the terms of the agreement, it will remain in place until 2036 unless extended at some point in the future. However, the current U.S. refusal to renew USMCA triggers another provision that requires all three countries to carry out annual reviews of the agreement until it expires.

U.S. officials would continue meetings with Mexico and Canada to address what Greer characterized as shortcomings in the agreement and ongoing trade deficits with those countries, he said. U.S. and Mexican officials plan to meet the week of July 20 for USMCA negotiations, he said.

What are Mexico's and Canada’s positions on the agreement? The Wednesday meeting’s discussions included the possibility of renewing the agreement for 16 more years, and Mexico wanted to do so, according to Mexican President Claudia Sheinbaum. She noted that major changes to the agreement weren’t likely, since they would need the approval of lawmakers in each country. Mexican officials are expected to advocate for lower U.S. tariffs on steel, autos, and aluminum at the upcoming meeting.

Canada also wanted to extend the agreement, according to Dominic LeBlanc, Canada's minister of Canada-U.S. trade. He highlighted the connections between the American and Canadian economies, describing his country as a stable partner in a time of global economic uncertainty. In future discussions with U.S. officials, he would focus on attempting to lower U.S. tariffs on Canadian steel, aluminum, autos, and lumber, he said.

Dig deeper: Read my report on the status of a trade deal between the United States and the European Union.