Future of USMCA Under Review

The United States-Mexico-Canada Agreement (USMCA) faces an uncertain future, with a joint review meeting scheduled for Wednesday.

During his presidency, Donald Trump, who has been critical of the North American Free Trade Agreement (NAFTA), praised the USMCA as “the largest, most important, modern and balanced trade agreement in history.”

As the USMCA approaches its 6th anniversary on July 1st, the upcoming conference will determine if the member countries want to extend the agreement beyond its initial 16-year term. Without an agreed extension in the next ten years, the USMCA will cease to exist.

Interestingly, despite signing the agreement in 2020, Trump recently expressed hesitations, stating he was “not a big fan” and wished it had not come to fruition.

“I liked it because we got out of NAFTA,” the president commented. “We would be better off without a deal…The main reason I wanted a deal was because there was no way out of NAFTA, which was the worst trade deal in history.”

This deal featured a “Sunset Clause,” which stipulates that it will expire after 16 years unless the member states opt to extend it. Notably, it’s the first time the U.S. has undergone such a review process in connection with a free trade agreement, leaving questions about how this will be approached by both the President and Congress.

A formal review process is anticipated to commence, with Congress noting that U.S. Trade Representative Jamieson Greer mentioned various topics for possible joint review. These include certain trade issues with Canada and Mexico as well as potential adjustments to duty-free trade regulations.