US declines to extend North American trade deal

US declines to extend North American trade deal The agreement remains in place for 10 years but will not be automatically renewed once it expires. WASHINGTON: The Trump administration on Wednesday (Jul 1) declined to extend the US-Mexico-Canada Agreement, starting a decade-long clock to wind down the trade deal as it seeks changes to try to reshore manufacturing jobs and reduce US trade deficits with its North American neighbours. The decision, revealed after a six-year review of the North American free trade zone, keeps the agreement in place for another 10 years with annual reviews before it expires, unless the three countries agree to renew it with changes. "The United States did not agree to renew the USMCA in its current form," US Trade Representative Jamieson Greer said in a statement. "As a result, the USMCA is not renewed. The United States will continue to engage with Mexico and Canada to address the agreement's shortcomings and our trade deficits with these countries." Greer said the US will proceed with a USMCA bilateral negotiating round scheduled with Mexico during the week of July 20. A senior administration official said that those talks in Mexico City would focus on strengthening North American rules of origin for autos and other industrial goods and economic security to keep other countries from benefiting from USMCA access. Mexican Economy Minister Marcelo Ebrard said in a video message on X that Mexico would go along with annual reviews, but work to resolve disputes in the trade deal that underpins a highly integrated North American economy with nearly US$1.6 trillion in annual trilateral goods trade. "We're in no rush, but we also don't want any uncertainty, which is why we need to try to reach an agreement on many issues we've been working on for months - issues that could change from one day to the next," said Ebrard, who participated in a virtual meeting on Wednesday with Greer and Dominic LeBlanc, the Canadian minister responsible for US-Canada trade. LeBlanc added that Canada would continue to work to address President Donald Trump's tariffs on Canadian steel, aluminium, autos and lumber. "We agreed on the importance of continuing our discussions and identifying ways to ensure trade and investment frameworks between Canada, the United States and Mexico continue to support North American prosperity and competitiveness," he said. Mexican President Claudia Sheinbaum said on Wednesday before the US announcement that a USMCA extension could happen any time that the three countries reach agreement over the next decade, adding: "The joint work continues - it's not as if everything ends today."