The United States will not negotiate a renewal of the U.S. Mexico Canada Agreement, following weeks of discussion over the mandated six-year joint review of the 2018 deal. The trilateral agreement will remain in effect through 2036, with annual joint reviews rather than an automatic extension.
"In accordance with the agreement, the United States, Mexico, and Canada met virtually today to discuss the operation of the USMCA," U.S. Trade Representative Jamieson Greer stated. "The United States did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed."
Representatives for both Mexico and Canada indicated willingness to continue negotiating the renewal of the agreement, the latter emphasizing the necessity to resolve the 2025 U.S. tariffs on steel, aluminum, and automobiles.
In addition to annual joint reviews, the 2018 agreement can be renewed at any time in the future if all three participating nations agree.
The USMCA took full effect in July 2020, replacing the 1994 North American Free Trade Agreement (NAFTA.) It was sought by the U.S. to promote “freer, fairer, and more balanced trade, boost regional manufacturing,” and update regulations for the digital economy. While the automotive sector is a primary focus for the current agreement, it also covers labor regulations and wages, agricultural products, and digital and intellectual property.
The U.S. Trade Representative had been negotiating the renewal with Mexican counterparts since June, but Canadian negotiators were not involved.
It’s likely that U.S. negotiators will seek bilateral agreements with Mexico and Canada, parallel to the trilateral review process. The U.S.-Mexico negotiating rounds are expected to continue.
The Trump Administration also indicated it intends to use the annual reviews to negotiate specific objectives, including negotiate revisions, including stricter rules of origin on automotive vehicles and components; higher U.S.-content requirements for manufactured goods; more regulation of transshipped products and off-shore investments; plus more U.S. access to Mexican and Canadian markets where it identifies barriers.
