The Trump administration on Wednesday 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, reported Reuters.
The decision, announced 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, including China, from benefiting from USMCA access.
Mexican Economy Minister Marcelo Ebrard told a news conference that Mexico wanted to help address US concerns about job losses and trade deficits, but the US and Mexico remain divided over US demands for stricter regional automotive rules of origin.
"There is no difference that I can identify between Mexico, the United States and Canada that is so big that we cannot resolve it," said Ebrard, who participated in a virtual meeting on Wednesday with Greer and Dominic LeBlanc, the Canadian minister responsible for US-Canada trade.
"We wouldn't allow our (auto) industry to be at a disadvantage," Ebrard said. "I'd say that has been the main point of discussion with the United States in all these talks: protecting our automotive industry."
LeBlanc added that Canada would continue to work to address President Donald Trump's tariffs on Canadian steel, aluminum, autos and lumber.
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