SASKATOON — United States President-elect Donald Trump could request an early review of the Canada-United States-Mexico Agreement, says a senior Canadian government official.
CUSMA is a 16-year free trade agreement between the three countries that was implemented in 2020 and expires in 2036. It is subject to periodic reviews, with the next one scheduled in 2026.
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Andrea Clements, minister-counsellor (commercial) senior trade commission of the Embassy of Canada to the United States, thinks Trump might push for an expedited review shortly after he takes office in January 2025.
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“I should note, however, that the review process does not require that CUSMA be reopened,” she said during a recent webinar hosted by Export Development Canada (EDC).
“It’s instead really an opportunity to ensure that the agreement remains fit for purpose and responsive to the changing economic landscape.”
She thinks the review could address issues such as economic security considerations, concerns about non-market practices and complaints about certain dispute settlement findings.
Clements is not overly concerned about Trump’s America First policy, mentioned frequently during his election campaign.
“Protectionist tendencies are not new and come from both sides of the aisle.”
Canada’s priority in the review will be to ensure market access and other key benefits of the agreement are preserved and continue to serve Canada’s interests.
“Our preference is to really keep the review as narrow and as targeted as possible,” said Clements.
Canada held public consultations about the upcoming review between Aug. 17 and Oct. 31. The government continues to consult with provinces and territories, stakeholders and other groups.
“The government is ready to advance and defend Canadian interests,” she said.
There was $1.3 trillion in trade between Canada and the U.S. in 2023, a $400 billion increase since 2015. That amounts to $3.5 billion of goods and services crossing the border each day.
Canada is the top export market for 36 states, so the agreement means a lot to the U.S. as well.
Clements said CUSMA lowers trade barriers and provides a stable and predictable trade environment for North American businesses.
“It’s really the envy of all other trading partners.”
Ross Prusakowski, deputy chief economist with EDC, said Canada will be negotiating with a country that has been outperforming its peers in many ways.
“The U.S. economy is maybe a bit more resilient and has a bit more energy than what we’re seeing in other countries,” he said.
That is due to the U.S. consumer, who has been spending at a higher level than many economists expected given the high interest rates.
“There just seems to be this innate desire to continue to consume that is really propelling the U.S. economy ahead compared to its global peers,” said Prusakowski.
That’s a powerful driver because consumer spending accounts for 70 percent of the U.S. economy. Business investment makes up another 10 to 15 percent and it too has been holding up well despite high interest rates.
“Overall, the outlook for the U.S. economy is quite strong,” he said.
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