Business
US seen not extending USMCA, starting decade-long countdown to end trade pact
US seen not extending USMCA, starting decade-long countdown to end trade pact
About this update from Stellantis N.v.
By David LawderU.S. President Donald Trump's administration is expected to formally declare on Wednesday that it will not extend the U.S.-Mexico-Canada Agreement on trade, starting a decade-long clock to wind down the 32-year-old North American free trade zone as the three countries haggle over proposed changes.That declaration will kick off a six-year review session, part of a "sunset clause" negotiated by President Donald Trump's first administration. However, it will do little to alter contentious negotiations over the pact's future, including sweeping demands to boost U.S. and regional content in North American automotive production and trade protections to block Chinese goods from benefiting from USMCA.Trade chiefs from the U.S., Mexico and Canada are expected to meet virtually on Wednesday and declare whether they want to extend the pact for another 16 years.A spokesperson for U.S. Trade Representative Jamieson Greer said he has made no formal announcement of his intention towards USMCA. But Greer has already scheduled a third round of negotiations with Mexico for the week of July 20, signaling his intent to keep pushing for changes."We expect July 1st to come and go, and for the United States to not confirm its wish to extend," said Greta Peisch, a former USTR general counsel who is now a trade partner at Wiley Rein in Washington.Peisch added that it's unclear "whether the U.S. says exactly what it's looking for in a public way" in a statement expected after the meeting.Mexico's economy minister, Marcelo Ebrard, said on Tuesday he does not expect the trilateral trade agreement to be scrapped. The country's president, Claudia Sheinbaum, also said on Tuesday that she had signed a letter calling for the USMCA to be extended for 16 years.Canadian Prime Minister Mark Carney said he expected a "constructive exchange" between the three countries but no agreements to sign."The priority is to get a new deal," Carney said. "We're ready to negotiate an improvement of this agreement."Trump has already unilaterally ended the duty-free status of USMCA by imposing tariffs of 25% on Canadian and Mexican autos and parts and 50% on steel and aluminum from the two countries, prompting retaliation from Canada.Although Canada has not yet participated in formal negotiations with the U.S., Carney said technical talks on aluminum, steel, autos and softwood lumber have pro...