U.S. sets 10-year path to wind down trade pact with Mexico and Canada
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U.S., Canadian and Mexican flags (Photo: REUTERS/Rebecca Cook/File Photo)
The administration of U.S. President Donald Trump will not
renew the United States-Mexico-Canada Agreement, or USMCA, as it stands,
setting off a 10-year process to gradually wind down the North American free
trade framework that has operated for 32 years.
Reuters
reported the decision. The Trump administration wants to amend the agreement to
bring manufacturing jobs back to the United States and reduce trade deficits
with its neighbors.
The decision, announced after a six-year review, keeps the
agreement in force for another 10 years with annual reviews until it expires,
unless the three countries agree to renew it with changes.
“The United States has not agreed to renew the USMCA in its
current form ... The United States will continue to work with Mexico and Canada
to address the agreement’s shortcomings and reduce trade deficits with those
countries,” U.S. Trade Representative Jamieson Greer said.
Greer said bilateral talks with Mexico on the USMCA are
planned in Mexico City after July 20. The talks will focus on strengthening
rules of origin for vehicles and other manufactured goods, as well as on
economic security to prevent other countries, including China, from using USMCA
market access to their advantage.
Mexican Economy Minister Marcelo Ebrard said Mexico City
wants to help address Washington’s concerns over job losses and trade deficits.
“I cannot identify any difference between Mexico, the United
States and Canada that is so great that we cannot resolve it,” Ebrard said.
On July 1, 2026, he held online talks with Greer and
Canadian Minister Dominic LeBlanc, who is responsible for trade relations with
the United States.
LeBlanc said Canada would continue working to resolve U.S.
tariffs on Canadian steel, aluminum, cars and lumber.
“We agreed on the importance of continuing our talks and
finding ways to ensure that the trade and investment framework between Canada,
the United States and Mexico continues to support North American prosperity and
competitiveness,” he said.
Mexican President Claudia Sheinbaum said before Washington’s
official statement that the USMCA could be extended at any time over the next
10 years if the parties reach an agreement.
“Joint work continues. This does not mean that everything
ends today,” she said.
The USMCA was negotiated by Trump’s first administration to
strengthen the 1994 North American Free Trade Agreement and underpins a highly
integrated regional economy with annual three-way trade of about $1.6 trillion.
Earlier, Switzerland and India agreed on a free trade deal
after 16 years of negotiations.
In March 2025, European Commission President Ursula von der
Leyen and Prime Minister Narendra Modi agreed to conclude a free trade
agreement between the EU and India by the end of 2025.
In January 2026, the European Union and India agreed to
create a free trade area after nearly 20 years of negotiations.
On July 1, 2026, a Comprehensive Economic Partnership
Agreement between Ukraine and the United Arab Emirates took effect, creating a
free trade area between Ukraine and the UAE by removing tariffs.
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