Adding to the uncertainties surrounding trade amongst the US, Mexico and Canada is the forecast that a new agreement is unlikely once the current one expires.
The deadline for renewing the US-Mexico-Canada Agreement — the successor to the better-known NAFTA — is July 1, but Bloomberg reports that according to those close to the situation, there is not likely to be a deal done by then. And while automobiles are the main topic of contention, the agreement also impacts lumber and other building supplies imports into the US from Canada. The three countries are believed to do more than $2 trillion in trade with each other.
The current agreement is supposed to remain in place until at least 2036, Bloomberg reported but without this renewal, there could be annual reviews as well as separate talks between the individual nations. The Trump administration appears to be the one that is holding up the renewal, the news agency said, as it looks for better terms for trade with its northern and southern neighbors. It has already initiated bilateral talks with them over trade issues and Bloomberg said individual side deals could be agreed to, circumventing the broader USMCA treaty, which was signed by the president during his first term when it replaced NAFTA.
US Trade Representative Jamieson Greer told Bloomberg the US wouldn’t “rubber-stamp” an extension of the agreement, while Dominic LeBlanc, the Canadian minister responsible for US trade, met with Greer earlier this month. In Washington and afterward, suggested that July 1 shouldn’t be seen as a crucial date. “I think we’ve got to be careful not to set up a cliff that doesn’t exist,” he said. Bloomberg said the office of the USTR declined to comment and instead referred to recent remarks by Greer, when he told a French news service, “I don’t think we’re going to renew it outright, but we’ll engage in the separate negotiations.”
