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Canada has given the U.S. and Mexico official notice that it wants the free trade deal between the three countries to be renewed.
In a letter to his American and Mexican counterparts, Canada-U.S. Trade Minister Dominic LeBlanc said the country is seeking renewal of the Canada-U.S.-Mexico Agreement (CUSMA) when it comes up for review on July 1.
LeBlanc is in Washington Tuesday for a meeting with U.S. Trade Representative Jamieson Greer, a member of U.S. President Donald Trump’s cabinet.
High on the agenda for Canada in the CUSMA talks is getting relief from Trump’s tariffs, which Prime Minister Mark Carney has characterized as a violation of the trade agreement.
Greer has repeatedly said — including just last week — that tariffs are a new reality that Canada is going to have to live with.
All the signals from the White House over the past year and a half indicate that the Trump administration does not want a straightforward renewal of CUSMA and instead wants significant changes to its terms, including on automotive exports and access to Canada’s dairy market.
The Trump administration wants the agreement amended to require that a minimum of 50 per cent of vehicle content must be made in the U.S. to qualify for tariff-free access to the American market, according to a report in the Wall Street Journal.
In the letter, LeBlanc calls CUSMA “highly beneficial to each of our countries and to the integrated North American economy,” but goes on to acknowledge that the other countries may want to propose “improvements.”
Canada “is willing to consider any proposal that can be beneficial to all three nations’ long-term prosperity.”
Carney downplays Mexico’s head start on talks
LeBlanc’s meeting with Greer on Tuesday is only the second time the pair have met face to face since October, when Trump scrapped talks with Canada, ostensibly over an anti-tariff TV advertisement by the Ontario government.
Meanwhile, the U.S. held two days of formal bilateral talks on CUSMA with Mexico last week and has scheduled two further rounds of negotiations in June and July.
Carney is downplaying the significance of Mexico being ahead of Canada in its talks with the U.S. on the trade deal.
He told reporters on Parliament Hill Tuesday that the U.S. has almost 60 issues with Mexico related to CUSMA, roughly double the number it has with Canada.
A review of the Canada-U.S.-Mexico Agreement is supposed to be less than a month away, but Ottawa and Washington remain at odds on numerous topics including tariffs, alcohol sales and supply management.
Carney said the U.S. tariffs on Canadian steel, aluminum, automobiles and forest products are a fundamental issue between the two countries.
“We’re looking to determine whether there’s a possibility of a new partnership there,” Carney said, echoing his comments to a business audience in New York last week.
The CUSMA talks come with Carney signalling a bit of a shift in Canada’s approach to the U.S. on trade.
He is now speaking about co-operating in economic sectors threated by global competition, a proposal aligned with Ontario Premier Doug Ford’s calls for “Fortress North America.”
Trump makes new ’51st State!’ post
It’s anything but clear that Trump sees things that way. After rarely mentioning Canada over the past few months, he trolled the country on social media Monday night.
“51st State!” he wrote in a post citing a news article about the Canadian economy hitting a technical recession, defined as two consecutive quarters of negative GDP growth.
The U.S. ambassador to Canada, Pete Hoekstra, posted a screenshot of Trump’s “51st State!” post to X on Tuesday.
David Paterson, Ontario’s representative in Washington, D.C., says the trolling is typical of the kind of gamesmanship that many countries have faced from Trump.
“I don’t think we should get too upset about those things,” Paterson told CBC News Network on Tuesday. “It doesn’t help us to do the job, which is to solve issues, and there are real issues that have to be discussed.”
CUSMA shields most Canadian exports from tariffs
CUSMA covers roughly $1.3 trillion in annual Canada-U.S. trade in goods and services and currently shields a large swath of Canadian exports from Trump’s tariffs.
Under the text of the agreement, the three countries must state by July 1 — six years after the deal took effect — whether they want to renew it or renegotiate it.
Whatever happens on July 1, CUSMA is slated to remain in effect until 2036. However, any country can withdraw from it at any time with six months’ notice.
Trump signed CUSMA in his first term and at the time hailed it as the most significant trade agreement in history. This term, he has floated the idea of walking away from the deal.
However, major U.S. business and agriculture groups have almost universally urged the White House to renew the agreement, leading experts to question whether Trump’s withdrawal threat is merely a negotiating tactic.
Brian Clow, who advised former prime minister Justin Trudeau on Canada-U.S. relations, says the Carney government should not approach the talks thinking it must get a deal at any cost.
“The notion that Trump will actually fully withdraw from the CUSMA deal, I think is very unlikely. It would cause so much damage to the U.S. economy,” Clow told CBC News Network on Monday.
The Canada-United States-Mexico Agreement is up for review on July 1. It’s the free trade deal that impacts more than $1 trillion of the Canadian economy each year. Trump has previously threatened to abandon the agreement, but some trade experts are calling his bluff. Here’s everything you need to know about the agreement, and what’s at stake.
