The administration of US President Donald Trump has announced its refusal to renew the United States-Mexico-Canada Agreement (USMCA) in its current form.
U.S. Trade Representative Jamison Greer said in an official statement that the agreement will remain in effect "until outstanding issues are resolved or the agreement is terminated," noting that the United States will hold a third round of negotiations with Mexico during the week beginning July 20.
Jarir added: "The United States will continue to engage with Mexico and Canada to address the shortcomings of the agreement and the trade deficit with these two countries."
The agreement, signed in 2018, entered into force on July 1, 2020, and is set to expire automatically on July 1, 2036, unless the three member states formally agree to renew it for an additional 16 years. Canada had urged the United States and Mexico to extend it before the deadline, but Washington's refusal will now force the agreement into a cycle of annual reviews over the next decade.
This move comes as part of Trump's efforts to change trade relations with the United States' neighbors, as he imposed tariffs on Canada and Mexico at the beginning of his second term, with the aim of reducing the trade deficit, which reached $46 billion with Canada and $197 billion with Mexico, according to Reuters data.
A senior US administration official revealed that Washington discussed with Mexico strengthening the rules of origin of the agreement, improving compatibility in economic security, and resolving bilateral issues, stressing that Mexico "understands the administration's tariff policies" and has made proposals to reduce the deficit.
In contrast, the official noted that Canada's position was different, as it was among the few countries that responded to the US trade measures, but he confirmed that talks with Ottawa were ongoing. Trump had previously stated that he did not intend to renew the agreement, considering the previous NAFTA deal to be the "worst trade deal" he had ever seen, and that while he had improved it, he reserved the right to terminate it.
