Donald Trump has declined to renew the United States-Mexico-Canada Agreement (USMCA), the North American trade pact he once championed as his signature deal. Instead, the US has opted to keep the agreement on a short leash of annual reviews rather than committing to another 16 years.
Wednesday was the deadline built into the USMCA for the three countries to jointly decide its fate, with the pact set to expire in 2036. After virtual talks between officials from all three governments, the US trade representative’s office confirmed that Washington had walked away from renewing the deal on its existing terms, citing persistent US trade deficits with both neighbours.
The refusal does not kill the pact outright. USMCA stays in force while negotiations continue, but it will now face a review every year rather than once every six, as originally designed. A senior administration official said Trump had “chose not to rubber stamp a USMCA renewal without addressing existing issues”.
Jamieson Greer, the US trade representative, said the US would “continue to engage with Mexico and Canada to address the Agreement’s shortcomings”. Mexico’s economy minister, Marcelo Ebrard, expressed confidence that differences could be resolved, stating: “There is no difference that I can identify between Mexico, the United States and Canada that is so big that we cannot resolve it.”
Trump has routinely criticised the USMCA of late, and last month threatened to abandon it. However, he struck the deal himself in 2020 as an updated version of Nafta, describing it at the time as the “fairest, most balanced, and beneficial trade agreement we have ever signed into law”. The shift to annual reviews raises the prospect of damaging businesses that rely on the USMCA, which governs about $2tn annually in goods and services between the three countries.
