Greer Works to Salvage North American Trade Deal After Trump Lets Renewal Deadline Lapse

The Trump administration’s top trade envoy, Jamieson Greer, is working to salvage a trade deal brokered between the United States, Canada, and Mexico during President Trump’s first term as the Trump administration failed to agree on terms for renewal by Wednesday’s deadline. Mr. Greer is hoping to come to favorable terms quickly as the risks of uncertainty mount for American businesses. The trilateral deal was negotiated by Mr. Trump with Canadian and Mexican leaders during his first term after he ran explicitly against the Clinton-era North American Free Trade Agreement during his 2016 campaign. Mr. Trump — like many populists who believed the agreement helped move American jobs overseas — believed the agreement was struck to the detriment of middle-class Americans.As written, the current deal in force includes a number of provisions aimed at protecting jobs in North America by requiring an increase in domestic automotive production, a lowering of trade barriers of certain products between the three countries, and increased protections of intellectual property, among other things. The deal quickly increased already close trade relationships between the U.S. and its Canadian and Mexican counterparts. According to the U.S. Trade Representative’s office, in just one year between 2021 and 2022, U.S. exports to Canada and Mexico increased by 16 percent, up to more than $680 million. Canadian and Mexican imports to the United States also increased significantly, up more than 20 percent between 2021 and 2022. Despite those successes, Mr. Trump has shown a notable lack of interest in renewing the deal. “I’m not looking to renew it,” Mr. Trump told reporters in the Oval Office back in June. “To be honest with you, the United States does much better. We don’t need anything that Canada has. We don’t need anything that Mexico has, but they need everything that we have, and they have to treat us better.” He said he wants to see an elimination of U.S. trade deficits with Canada and Mexico. The agreement sets out timelines for either renewal or termination by one or all of the three North American nations. All three countries must renew the agreement every six years, either as is or with agreed-upon changes. The deal automatically terminates 16 years after enactment if no renewal is made. The six-year deadline to renew was on Wednesday, though American negotiators say they are not yet near a deal, which could lead to a significant spike in uncertainty for the countless American businesses that do business in Mexico and Canada. “The United States, Mexico, and Canada met virtually today to discuss the operation of the USMCA. The United States did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed,” the U.S. Trade Representative’s office said in a statement on Wednesday. The deal is still in effect even as the renewal date has passed, with Mr. Greer saying that negotiations will continue. He plans to meet with Mexican officials on July 20. “The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries. However, the Agreement remains in force pending resolution of these issues or until the Agreement’s termination,” Mr. Greer’s office said.With the uncertainty surrounding the terms of a renewal agreement, some American businesses could suffer in the coming months, particularly those in energy and manufacturing states. North Dakota, for example, where the president traveled on Wednesday, exports just under 90 percent of its products to Canada or Mexico, according to the Peterson Institute for International Economics. More than 35 percent of Texas’s exports, including $42.6 billion worth of petroleum, go to America’s southern and northern neighbors, while in Michigan, nearly 65 percent of its exports, largely related to the automotive industry, are sent to America’s neighbors immediately north and south.Mr. Trump said he may be fine with the deal lapsing altogether. Though he used tariffs in a significant want during his first term, his second stint in the White House has been marked by the throwing up of new trade barriers, including his “Liberation Day” tariffs, which were later struck down by the Supreme Court. Mr. Trump’s use of tariffs has been constrained by the courts, though his retributive streak has not faded. He has used the import taxes on Canadian goods to punish Prime Minister Mark Carney and other critics north of the border, deployed tariffs to try to pressure the Europeans into handing him control of Greenland, and once even slapped tariffs on Swiss goods after a top government official there was rude to him.The Canadians have been especially eager to close the deal with Mr. Trump, especially searching for relief from painful American tariffs on key goods like metals and automotive parts. In a statement Wednesday, Canada’s minister for bilateral trade relations, Dominic LeBlanc, said he is negotiating from a position of “strength” with the Trump administration. “At a time of global economic uncertainty, Canada is a stable, reliable and trusted partner. We have the energy and natural resources the world needs, a world-class workforce, and a predictable business environment attracting the highest investment in decades,” Mr. LeBlanc said.

Greer Works to Salvage North American Trade Deal After Trump Lets Renewal Deadline Lapse

Greer Works to Salvage North American Trade Deal After Trump Lets Renewal Deadline Lapse

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