U.S. declines to extend CUSMA in current form, annual reviews likely

The United States has declined to extend the Canada–United States–Mexico Agreement (CUSMA) in its current form, a move that could subject the continental trade pact to annual reviews and renewed negotiations.

The announcement was made Wednesday by U.S. Trade Representative Jamieson Greer following a virtual meeting with Canadian Trade Minister Dominic LeBlanc and Mexico's Economy Secretary Marcelo Ebrard. According to the U.S. Trade Representative, the decision reflects concerns over shortcomings in the agreement and the United States' trade deficit.

Under the agreement's existing terms, CUSMA will remain in force until July 2036. However, the prospect of annual reviews could create uncertainty for North American supply chains, particularly in the automotive and manufacturing sectors that rely on stable cross-border trade rules.

Ebrard said he remains optimistic that outstanding issues can be resolved through negotiations. LeBlanc said Canada, the United States and Mexico have agreed to continue discussions on the future of the agreement.

CUSMA replaced the North American Free Trade Agreement (NAFTA) in 2020 and governs approximately US$2 trillion in annual trade among the three countries.