U.S. declines to extend CUSMA trade deal with Canada, Mexico

U.S. declines to extend CUSMA trade deal with Canada, Mexico

Trump administration's move doesn't kill agreement, but triggers fresh negotiations and uncertainty

U.S. President Donald Trump's administration is opting not to extend its trade agreement with Canada and Mexico, triggering what are expected to be tough negotiations on amending the deal.

The announcement by U.S. Trade Representative Jamieson Greer followed a virtual meeting on Wednesday with Canada-U.S. Trade Minister Dominic LeBlanc and Mexico's economy secretary, Marcelo Ebrard.

The U.S. announcement does not kill CUSMA, which does not expire until 2036.

Wednesday was the deadline set out in the text of the deal for each country to declare whether they want to extend it to 2042 or renegotiate its terms.

The U.S. move was widely anticipated, although the Trump administration had not made it official until now.

Mexico and Canada had previously stated they wanted CUSMA extended, and were willing to discuss amendments.

What July 1 means for CUSMA, Canada's trade deal with the U.S. and Mexico

Trump signed the agreement in his first term and hailed it at the time as historic. In recent weeks, he has frequently disparaged CUSMA but has stopped short of threatening to terminate it.

Any country can withdraw from the deal – known as USMCA south of the border – with six months notice.

"The United States did not agree to renew the USMCA in its current form," said Greer in a statement. "The United States will continue to engage with Mexico and Canada to address the agreement’s shortcomings and our trade deficits with these countries."

In a conference call with reporters, a senior Trump administration official said the president reserves the right to withdraw from the agreement.

LeBlanc said the three countries agreed Wednesday on the importance of continuing their discussions.

"For Canada, this includes substantive discussions with the United States on addressing sectoral tariffs on Canadian steel, aluminum, autos and lumber," LeBlanc said in a statement.

Mike Crawley is a correspondent for CBC News, based in Washington. He began his career as a newspaper reporter in B.C., spent six years as a freelance journalist in various parts of Africa, then joined the CBC in 2005. Mike reported on Ontario politics for 15 years. He was born and raised in Saint John, N.B.