Canada has sent a letter to the U.S. and Mexico proposing a 16-year extension of the trilateral USMCA trade deal and calling for parallel negotiations on sectoral tariffs. The move comes ahead of a meeting between Canadian and U.S. trade negotiators on Tuesday.
Canada-U.S. Trade Minister Dominic LeBlanc laid out the proposals in a letter on Tuesday. He is expected to meet U.S. Trade Representative Jamieson Greer, after Canada was sidelined from bilateral talks between the U.S. and Mexico last week. Janice Charette, Canada’s chief trade negotiator in the U.S., will accompany him.
“The Joint Review process gives us a chance to examine the Agreement to assess whether there are ways to strengthen it and consider improvements needed to keep pace with changing economic conditions,” the letter states.
The letter also stresses that, alongside the USMCA review, addressing sectoral tariff issues is essential. The U.S. has previously imposed tariffs on steel, aluminum, and autos, hurting Canada’s economy.
Canada criticized for slow approach
This is the second meeting between LeBlanc and Greer since their first in March, though the two have held several phone calls, including last week, according to government sources.
Businesses have criticized Canada for being slow to start the USMCA review process, which must be formally completed by July 1, while Mexico has been more proactive in engaging with the U.S. administration.
U.S. President Donald Trump suspended all negotiations with Canada late last year after the province of Ontario aired an ad featuring former President Ronald Reagan warning that tariffs lead to trade wars.
“On discussions with the U.S., there is a set of technical issues they have with Mexico, they have with us, that’s why there’s a branching discussion,” Prime Minister Mark Carney told reporters on Tuesday.
In a speech in New York last week, Carney said a stronger Canadian economy would boost U.S. growth. “A strong Canada will help make America great again,” he said, drawing rare praise from the U.S. ambassador to Canada.
The Office of the U.S. Trade Representative said the U.S. and Mexico concluded the first round of bilateral talks on USMCA changes last week, discussing auto rules of origin, steel and aluminum trade, and economic security.
If all three countries do not agree to an extension, the deal will move to an annual review mechanism until 2036.
Greer has suggested that Canada may have to accept some form of tariffs to join the deal review with the U.S. He has also said the revised agreement should include stricter auto rules of origin and provide greater access for U.S. businesses to the Canadian market, such as in dairy.
Restrictions on alcohol sales by Canadian provinces have also been a source of tension with the U.S. administration.
