Consultation process initiated by the United States spans over a period of 45 days
Following Donald Trump's first electoral victory, the negotiation of the USMCA, often referred to as the 'new NAFTA,' became a crucial test for Ottawa. This trade agreement, signed in 2018, has since been a significant focus for Canadian officials.
The Canada-Mexico relationship, built on over three decades of free trade, remains strong, according to former Bank of England governor, Mr. Carney. However, both countries have been affected by the distinct tariffs imposed by Trump on steel, aluminum, copper, and automobiles.
In an effort to find solutions for these sectors, Canadian officials have prioritised the negotiation of a bilateral economic and security agreement before the CUSMA review. This approach is aimed at mitigating the impact of these tariffs.
Prime Minister Mark Carney has stated that he is seeking to modify certain aspects of the continental trade pact. This intention marks the first official step towards renegotiating the agreement signed under the Trump administration.
The United States has initiated a 45-day period of public consultations for the mandatory review of the Canada-United States-Mexico Agreement (CUSMA) next year. This consultation process includes a public hearing in November.
David Paterson, Ontario's representative in Washington, has been actively discussing with numerous U.S. sectors and companies that depend on CUSMA. He has indicated that interest in critical minerals, aviation, defense, automotive, and other sectors that depend on trade with Canada remains strong.
In a positive development, the agro-food trade has largely unfolded smoothly within the framework of the USMCA, according to Mr. Madan, Manitoba's representative in the United States. This is significant given that Canada, including Manitoba, provides a significant portion of the food consumed by Americans.
In 2024, Manitoba exported $4.29 billion worth of agro-food products to the United States and imported $1.9 billion. This trade relationship is expected to continue, as both countries benefit from the continued smooth operation of the USMCA.
Former U.S. Trade Representative Robert Lighthizer described the negotiations as difficult and sometimes contentious in his book. Despite these challenges, the USMCA has been an exception to the new reciprocal tariffs, indicating that imports from Canada and Mexico are not subject to these tariffs within the agreement's framework.
Prime Minister Mark Carney has highlighted that this agreement puts Canada in a favorable position compared to other countries, even countries like the United Kingdom and South Korea, which have signed bilateral agreements with the Trump administration.
As the USMCA review process continues, both Canadian and American officials are working towards finding solutions that benefit both countries and maintain the strong trade relationship that has been established over the past three decades. This week, Prime Minister Carney is set to travel to Mexico to meet with President Claudia Sheinbaum, further emphasising the importance of this trade agreement.
In addition, Richard Madan, Manitoba's representative in the United States, aims to encourage U.S. partners who benefit from supply chains and market access to Manitoba due to CUSMA to share examples of success, economic data, or examples of harmonious collaboration that CUSMA offers. This initiative is aimed at further highlighting the benefits of the USMCA and promoting its continued success.
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