North America trade pact talks to blow past renewal deadline

WASHINGTON: The US, Mexico and Canada are widely expected to continue talks on extending a North American free trade pact – blowing past a Wednesday deadline for its renewal.

The deal, known as the US-Mexico-Canada Agreement (USMCA), remains in force for 10 years even if it is not renewed by July 1. But it will be subject to annual reviews thereafter, unless one party withdraws entirely.

The USMCA was implemented in 2020, replacing NAFTA, the North American Free Trade Agreement that went into force in 1994.

US President Donald Trump said in June that he was not “looking to renew” the pact, which he signed and praised during his first term.

Canada and Mexico have called for a 16-year renewal of the USMCA, but Trump has called it “irrelevant”.

On Wednesday, officials from the three countries are expected to meet and confirm if they wish to extend the agreement.

Canada’s Prime Minister Mark Carney said he anticipated that meeting would be “a constructive exchange”.

“I’m not expecting any drama tomorrow,” Carney said, joking that he did not foresee a last-minute breakthrough and deal-signing.

“I’m not looking for my pen,” the prime minister told reporters, with a grin on his face.

Mexican President Claudia Sheinbaum said Tuesday that she is waiting for the US to confirm its position.

The US and Mexico are scheduled to hold a third round of negotiations on the week of July 20 in a signal that parties continue seeking changes.

US trade representative Jamieson Greer did not announce a schedule for formal talks with Canada but has also met with his Canadian counterpart, Dominic LeBlanc.

‘Slim chance’ of withdrawal

The July 1 deadline may be “symbolically important”, but blowing past it does not bring practical impact for now, said Greta Peisch, a partner at law firm Wiley Rein.

Peisch, a former general counsel at the USTR’s office, told AFP the Trump administration has signalled that it wants to see two areas of changes.

“One is on adopting rules and changes in the agreement that drive more manufacturing, not just to North America, but to the United States,” she said.

The other is to address longstanding “irritants” such as Canada’s dairy market restrictions.

Washington is devoting “time and effort into renegotiating the agreement”, she said. “So I do see that they want to keep it in one form or another.”

Scott Lincicome of the libertarian Cato Institute sees a “really slim chance” that Trump would withdraw from the USMCA.

Even as Trump unleashed tariffs on virtually all trading partners, he made key exemptions for USMCA products.

North American supply chains are deeply integrated, Lincicome added, meaning the “economic effects would be pretty horrendous” if Washington pulled out.

The goods and services trade within North America totalled nearly US$2 trillion in 2024, analysts estimate.

Lincicome expects that the missed deadline will “inject more uncertainty into the relationship”.