U.S. Trade Representative Jamieson Greer has revealed that the Trump administration is contemplating separate trade agreements with Canada and Mexico. This shift could mark a significant departure from the longstanding trilateral Canada-U.S.-Mexico Agreement (CUSMA), which is up for renewal in 2026.
Potential Shift in Trade Strategy
During an event hosted by the Atlantic Council, Greer articulated the distinct economic relationships the U.S. has with each neighbor. He highlighted fundamental differences in labor markets, import-export profiles, and governance between Canada and Mexico. This rationale supports the idea of negotiating separate agreements rather than maintaining a unified strategy.
Timeline for Decision
All three countries must notify each other by July 1, 2024, regarding their intentions for CUSMA. They can choose to extend, renegotiate, or let the agreement lapse. A report from Greer to U.S. Congress is expected by January 2, 2024, outlining the administration’s position.
Separating Negotiations
Greer noted that discussions with Canada and Mexico have been conducted independently, without any joint meetings involving all three nations this year. He stated, “I have not had a meeting this year where I sat with Canada and Mexico in a room.”
Possible Outcomes
Greer emphasized that various scenarios are possible: exiting, revising, or renegotiating CUSMA. He hinted at the likelihood of forming separate agreements, indicating ongoing dialogues with both countries.
- Exit CUSMA: A possibility if negotiations do not yield favorable results.
- Revise CUSMA: Adjusting terms to align with current trade dynamics.
- Renegotiate: A potential path to address grievances and improve trade conditions.
Industry Perspectives
Recently, many industries have advocated for retaining CUSMA during public consultations. Greer highlighted concerns regarding the agreement’s “rules of origin,” which determine the eligibility for tariff-free treatment based on product content. U.S. industries have accused some Canadian firms of circumventing these rules by incorporating cheaper materials from abroad.
The Path Forward
While Greer acknowledged the complexities involved, he mentioned that critical minerals and alignment of external trade policies could be focal points for future negotiations, whether bilateral or trilateral. As this situation evolves, the U.S. administration’s direction will have significant implications for North American trade relations.
