By David Lawder
WASHINGTON, July 1 (Reuters) – Trade chiefs from the U.S., Mexico and Canada are reviewing their countries’ trade agreement on Wednesday, in an exercise expected to launch a decade-long sunset of the regional pact as they continue negotiations aimed at satisfying President Donald Trump’s desire to shift more manufacturing to the U.S.
Trump’s trade chief, Jamieson Greer, was meeting virtually with Mexican Economy Minister Marcelo Ebrard, and Dominic LeBlanc, Canada’s minister responsible for Canada-U.S. trade, to declare whether they want to extend the U.S.-Mexico-Canada Agreement for another 16 years.
But Greer has already said more time is needed to fix problems with USMCA and has scheduled another negotiating round with Mexico for the week of July 20. He has not begun formal negotiations with Canada on USMCA revisions.
Mexican President Claudia Sheinbaum, who has called for USMCA’s extension, said on Wednesday this could happen any time that the three countries reach agreement over the next decade.
“Today is not a deadline,” Sheinbaum said in her daily press conference in Mexico City. “If in five months or three years the parties say, ‘We can extend it for another 16 years,’ it can be extended.”
“The joint work continues — it’s not as if everything ends today,” she added.
Trump, who has imposed tariffs of 25% on Mexican and Canadian autos, 50% on metals, and 10% on lumber, has repeatedly said he does not want to extend USMCA, which he launched in 2020 as “the best agreement we’ve ever made.”
In two rounds of negotiations with Mexico, Trump’s administration has demanded that North American-built vehicles contain 50% U.S. content, pushing the regional total to 82%.
AUTO INDUSTRY CONCERNS
Denying a USMCA extension buys more time for negotiations but prolongs uncertainty over business investment decisions in the region, as the trade pact will be subject to annual reviews with its future in doubt.
U.S. auto industry officials are calling for a swift resolution that restores duty-free vehicle and parts trade between the U.S., Canada and Mexico. They argue the current tariffs leave them at a disadvantage to automakers in Japan and South Korea, which face only a 15% tariff and no rules of origin, allowing widespread use of cheaper, subsidized parts from China.
U.S. Representative Rosa DeLauro said she and many of her fellow Democrats in Congress want Trump to demand changes that help U.S. workers, arguing that USMCA failed to stop the decline of U.S. factory jobs that started under its predecessor, the 1994 North American Free Trade Agreement.
“If President Trump does not commit to renegotiating USMCA in a bipartisan fashion to strengthen worker protections, American workers will continue to pay the price. This is not the time for half measures or extensions of the status quo,” DeLauro said.
U.S. labor unions also have called for the review to prompt changes that will raise wages in Mexico and enforce labor and environmental rules.
“USMCA has so far failed to stop the race to the bottom on wages and working conditions across North America, as greedy corporations continue to shift production to Mexico,” United Steelworkers President Roxanne Brown said in a statement.
But Lana Payne, national president of Unifor, Canada’s biggest private-sector labor union, said Canada needed to stand up for its rights against Trump’s “Section 232” tariffs.
“Those tariffs are hurting workers and key industries like auto, steel, aluminum, and forestry,” Payne said. “The reality is Canada has things the U.S. needs, including critical minerals, aluminum, potash, and energy, to name a few. We need to stand firm, hold the line and use that strength to secure a fair deal for Canadian workers.”
(Reporting by David Lawder; Additional reporting by Kalea Hall in Detroit, Promit Mukherjee in Ottawa and Ana Isabel Martinez in Mexico City; Editing by Andrea Ricci and Paul Simao)
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