US says it won’t agree to renew USMCA

Lead

The United States has announced it will not agree to renew the US-Mexico-Canada Agreement (USMCA) in its current form, a move that sets the stage for a prolonged negotiation period over the trade pact's future. The announcement came from US Trade Representative Jamieson Greer, who stated that the US did not agree to renew the agreement and will continue to engage with Mexico and Canada to address its shortcomings and trade deficits. Mexico's Economy Minister Marcelo Ebrard confirmed the US decision in a video on X.

The USMCA, which came into effect on July 1, 2020, and is slated to expire in 2036, was up for its first joint mandatory review on Wednesday. The agreement includes a "sunset clause" negotiated during President Donald Trump's first term, which means that if all three countries do not commit to an extension, the pact will be subject to an annual review process until its expiration. This outcome, analysts say, could create significant uncertainty for businesses operating across North America.

Coverage comparison

Reports from Al Jazeera and the South China Morning Post provide a detailed picture of the developments surrounding the USMCA review. Al Jazeera reports that Greer's announcement was definitive: "The United States did not agree to renew the USMCA in its current form," he said, according to the outlet. Ebrard's confirmation on X aligned with the US statement, as reported by Al Jazeera.

South China Morning Post, which reported ahead of the official declaration, noted that the Trump administration was expected to declare its decision on Wednesday. The outlet also highlighted that trade chiefs from the US, Mexico, and Canada were expected to meet virtually to discuss the pact's future, with Greer having already scheduled a third round of negotiations with Mexico for the week of July 20.

The two outlets offered complementary perspectives: Al Jazeera focused on the official statements and the implications for Mexico and Canada, while South China Morning Post emphasized the procedural aspects of the sunset clause and the upcoming negotiations.

Key claims

• US Trade Representative Jamieson Greer announced that the US will not agree to renew the USMCA in its current form, as reported by Al Jazeera.
• Mexico's Economy Minister Marcelo Ebrard confirmed the US decision, according to Al Jazeera.
• The USMCA came into effect on July 1, 2020, and is slated to expire after 16 years, as reported by Al Jazeera.
• President Trump has expressed uncertainty about renewing the trade deal, saying on June 10, "I don't know that I'm going to renew it," as quoted by Al Jazeera. He also stated in January that there was "no real advantage" to the agreement, per the same outlet.
• Canada and Mexico want the trade agreement to continue, as reported by Al Jazeera.
• The USMCA has been beneficial to Canada and Mexico in the wake of tariffs imposed by Trump, according to Al Jazeera.
• Trump has used legal tools to tax USMCA-compliant goods, as noted by Al Jazeera.
• The USMCA includes a "sunset clause" negotiated by Trump's first administration, as reported by South China Morning Post.
• Trade chiefs from the US, Mexico, and Canada were expected to meet virtually on July 1 to discuss the agreement, according to South China Morning Post.

Perspectives

United States (via Jamieson Greer): The US Trade Representative said the US will not renew the agreement in its current form, citing the need to address the pact's shortcomings and trade deficits. A senior Trump administration official, as reported by Al Jazeera via Reuters, said the administration was not interested in prolonging negotiations and wanted a conclusion "as quickly as possible."

Mexico (via Marcelo Ebrard): Mexico's Economy Minister confirmed the US decision on X, indicating that Mexico had hoped for an extension.

Analysts and experts: Greta Peisch, a former USTR general counsel and trade partner at Wiley Rein, told South China Morning Post that she expected the US to not confirm its wish to extend. Tony Stillo, director of Canada Economics at Oxford Economics, told Al Jazeera that the resulting uncertainty could be "a definite dampener" for business decision-making. Vina Nadjibulla, vice president and head of research at the Asia Pacific Foundation of Canada, said the most likely scenario is an annual renewal process, though the dynamics of negotiations remain unclear.

Canada and Mexico: Both countries have indicated they want the agreement to continue, as reported by Al Jazeera. Canada sends nearly 80 percent of its exports to the US, highlighting the agreement's importance to its economy.

Correction: This article initially stated the USMCA was slated to expire after 16 years; the agreement is set to expire in 2036, as confirmed by Al Jazeera.