The US says it will not agree to renew the USMCA International Business News

The USMCA went into effect on July 1, 2020, and is expected to expire in 16 years.

The United States will not agree to renew its trade agreements with Canada and Mexico at this time, US Trade Representative Jamieson Greer said has announced.

“The United States has not agreed to reform the USMCA in its current form,” Greer said in a statement. “As a result, the USMCA is not being renewed. The United States will continue to negotiate with Mexico and Canada to resolve the problem of the Agreement and the decrease in our trade with these countries.”

Mexican Finance Minister Marcelo Ebrard confirmed in a video on X that the US chose not to extend the USMCA.

The trade agreement between the three countries was due to be reviewed for the first time on Wednesday, under the framework established during the first term of President Trump.

The USMCA went into effect on July 1, 2020, and is scheduled to expire in 2036.

Mexico and Canada are two of the largest trading partners in the US. Until recently, Canada exported about 80 percent of its exports to the US.

The U.S. believes the trade deal has not sufficiently reduced the deficit in U.S. trade with its North American neighbors, Reuters reported on Wednesday, citing an unnamed Trump official.

The official said that the administration did not want to prolong negotiations with Mexico and Canada, and that “we need to reach a decision as soon as possible.”

‘There is no real benefit’

Trump has repeatedly said he wants the USMCA out of existence, say in January that there was “no real benefit to it; it is useless.”

“I don’t know that I will renew,” he said on June 10, before indicating that he has the opportunity to negotiate with other parties in the union. We are talking to them, we will see if we can do something about it.

A week later, Mr. Trump again expressed a lack of clarity about the U.S. position. “I would not like to have a contract, but I can sign it,” he said during his visit to Paris.

If all three countries fail to commit to the extension, it will trigger an annual review process, which would make the USMCA controversial every year until 2036. Despite the US announcement on Wednesday, the USMCA remains in effect until it expires in 10 years.

“The most obvious thing is that it will go in annual renewal plan“Vina Nadjibulla, vice president and head of research at the Asia Pacific Foundation of Canada, a non-profit think tank, told Al Jazeera.

Following the US statement, Dominic LeBlanc, Canada’s internal trade minister, said the three countries agreed “on the need to continue our dialogue and identify ways to ensure that trade and investment flows”.

LeBlanc also confirmed Canada’s support for the deal. In early June, LeBlanc encouraged cooperation updated for 16 years.

The U.S. plans to meet with Mexico the week of July 20 to discuss renegotiating the trade deal.