Ottawa, Washington Begin To Eye USMCA Reauthorization

As experts at the law firm White and Case have explained, the three parties to the United States-Mexico-Canada Agreement (USMCA) are beginning domestic consultations ahead of a required 2026 joint review of the North American trade agreement that entered into force in 2020. (The 2026 review also starts a 10-year clock for expiration of the trade pact.)

This review could lead to changes in the agreement — and that seems to be exactly what several policymakers in the United States and Canada want.

Last week, Canada’s Deputy Prime Minister Chrystia Freeland said she shares concerns expressed by U.S. policymakers, both Republicans and Democrats, about Mexico essentially serving as a conduit for China to import cheaper goods into the North American market. “We are perfectly aligned with the United States and that means we are not a back door to unfair Chinese traded goods. The same cannot be said about Mexico,” Freeland said. “We believe that China’s intentional overcapacity is unfair and a threat to key Canadian industrial sectors. It is a threat to Canadian jobs and that’s why we’ve imposed 100 percent tariffs on Chinese electric vehicles, [and] 25 percent tariffs on Chinese steel and aluminum.”

Local leaders in Canada have made similar statements. Last week, The Associated Press reported the leader of Canada’s most populous province said all of the country’s provincial and territorial governments want Prime Minister Justin Trudeau’s federal government to negotiate a bilateral trade deal with the United States that excludes Mexico. “There’s a clear consensus that everyone agrees that we need a bilateral trade deal with the U.S. and a separate bilateral trade deal with Mexico,” Ottawa Premier Doug Ford told reporters after the call with his fellow provincial leaders. In her remarks, Freeland did not rule out that option.

Meanwhile, according to a survey by Canadian Manufacturers and Exporters, the National Association of Manufacturers in the United States, and the Confederation of Industrial Chambers of Mexico, 92 percent of manufacturers believe failing to extend the USMCA as part of the 2026 review would negatively impact their business to some degree. Additionally, 93 percent support increased economic integration between Canada, the United States, and Mexico to enhance the competitiveness of the North America’s manufacturing sector. Learn more about the survey results at this link.

Stay tuned to Connecting the Dots for all developments on USMCA reauthorization.