Canada, the United States and Mexico are set to launch the first mandatory review of the Canada-United States-Mexico Agreement (CUSMA) on July 1, marking a significant milestone that will help determine the future of North America’s free trade framework.
The virtual trilateral meeting will bring together trade officials from all three countries to assess the agreement, which came into force on July 1, 2020. Under CUSMA rules, member countries must conduct a joint review after six years to decide whether to extend the agreement for another 16 years or continue with annual reviews until its original expiry in 2036.
Canada’s Minister responsible for Canada-U.S. trade, Dominic LeBlanc, said he looks forward to meeting with his American and Mexican counterparts, describing the discussions as an opportunity to build on recent constructive talks while continuing to support Canadian workers, farmers and businesses.
Both Canada and Mexico have formally indicated they support extending CUSMA through 2042. However, uncertainty remains over the United States’ position, with President Donald Trump sending mixed signals in recent months by alternately supporting renegotiation, proposing bilateral trade agreements and suggesting the pact should be terminated altogether.
Despite the uncertainty, officials have stressed that July 1 is not a deadline for the agreement to end. If all three countries do not unanimously agree to a 16-year extension, CUSMA will remain in force while annual joint reviews are held over the next decade. During that period, the three countries can still agree at any time to extend the agreement for another 16 years.
If no agreement is reached by the end of the original term, CUSMA would expire in 2036. Separately, any member country retains the right to withdraw from the agreement by providing six months’ notice.
Trade experts say the most likely outcome is an extended period of negotiations rather than an immediate decision. Discussions are expected to focus on longstanding U.S. concerns over Canada’s supply management system, automotive rules of origin and measures aimed at preventing countries such as China from using North America as a tariff-free entry point.
Some U.S. officials have also floated replacing the trilateral agreement with separate bilateral trade deals with Canada and Mexico, although analysts say maintaining a continental framework remains the more practical option given the deeply integrated North American economy.
Prime Minister Mark Carney has said Canada will not rush into an agreement that fails to protect Canadian interests, emphasizing that any renegotiated trade deal must benefit all three countries.
Economists warn that terminating CUSMA would significantly disrupt supply chains and increase costs for businesses across North America, making a complete withdrawal an unlikely outcome despite recent rhetoric from Washington.
For businesses, investors and manufacturers, the July 1 review is expected to mark the beginning of what could be months—or even years—of negotiations aimed at modernizing the agreement while preserving tariff-free trade across North America.
