Donald Trump has refused to renew the United States-Mexico-Canada Agreement (USMCA), the North American trade pact he once hailed 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-year term.
Wednesday was the deadline for the three countries to jointly decide the pact's fate, which is set to expire in 2036. After virtual talks, the US trade representative's office confirmed 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; the USMCA stays in force while negotiations continue. However, it will now face a review every year instead of once every six years, as originally designed. A senior administration official said Trump had 'chose not to rubber stamp a USMCA renewal without addressing existing issues'.
In a statement, US Trade Representative Jamieson Greer 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, despite having struck the deal in 2020 as an updated version of Nafta. At the time, he described it 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 pact, which governs about $2tn annually in goods and services.
