U.S. won’t renew USMCA, will review trade pact with Canada and Mexico
FILE PHOTO: U.S. President Donald Trump arrives with Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau to make an announcement on the signing of a new free trade agreement on the sidelines of the G20 Leaders Summit in Buenos Aires on November 30, 2018.
Saul Loeb | AFP | Getty Images
The Trump administration has decided not to renew the trilateral trade agreement with Canada and Mexico; instead, he opted for annual reviews of what President Donald Trump once called the “largest trade deal.” best deal We’ve done it so far.”
The widely anticipated decision on the U.S.-Mexico-Canada Agreement, known as USMCA, was announced Wednesday, the deadline for three North American trading partners to determine whether they will renew their agreement for another 16-year term.
The decision means the USMCA will remain in effect for another decade if no member tries to withdraw. But it also triggers annual reviews that could result in key parts of the agreement being renegotiated.
“Trump chose not to approve the USMCA renewal without addressing existing issues,” a senior administration official told reporters on a call announcing the move.
“So in other words, the United States did not agree to renew the USMCA in its current form. So, as a result, the USMCA is not being renewed,” the official said.
Trump’s “core” issue with the USMCA centers on America’s trade deficits with two of its trading partners, according to the official.
The official added that Trump had “already changed the nature of the U.S.-Canada-Mexico trade relationship” through his tariffs ahead of Wednesday’s deadline. “So we’ve already seen that the USMCA is to some extent subject to the president’s robust trade policy and policy adjustments.”
US Trade Representative Jamieson Greer said in a statement while the call was continuing that the Trump administration “will continue to engage with Mexico and Canada to address the shortcomings of the agreement.”
USMCA was negotiated during Trump’s first term to replace the 26-year-old trilateral trade agreement known as NAFTA, which Trump has frequently described as a crude deal for the United States.
When the new agreement took effect in July 2020, Trump touted it as “the fairest, most balanced and beneficial trade agreement we have ever signed.”
But Trump’s interest in the USMCA has waned recently, coinciding with rising tensions in U.S. relations with its two neighbors.
Trump: “I don’t know if I’ll renew” in question USMCA in June. “We don’t need anything Canada has. We don’t need anything Mexico has, but they need everything we have. And they need to treat us better.”
Trump has long complained about the ongoing trade deficits with the United States’ economic partners. Seeking to address this perceived injustice and push for other policy changes, Trump imposed a series of tariffs on nearly every country during his second term, including Mexico and Canada.
Trump’s tariff regime has since been hobbled by court losses.
The United States and Mexico had already begun a series of bilateral negotiations that were planned to continue beyond the July 1 deadline. However, the United States and Canada have not initiated their own negotiations.
