Trade Analysts Warn of 'Hostility' in Upcoming Canada-U.S. CUSMA Negotiations
With the critical review deadline for the Canada-United-States-Mexico Agreement (CUSMA) now less than three months away, trade analysts are sounding alarms about Canada's precarious position at the negotiating table. According to multiple experts, Canada should brace for significant hostility from its southern neighbor as bilateral discussions approach.
Canada Lagging Behind Mexico in Preparations
Trade analyst Greer recently told Fox Business that Canada has fallen behind Mexico in preliminary discussions, specifically pointing to provincial bans on U.S. alcohol as a major obstacle that could derail negotiations before they properly begin. This assessment comes despite a reportedly productive meeting between Canada-U.S. Trade Minister Dominic LeBlanc and Greer in early March.
Meanwhile, Mexico has already launched bilateral technical discussions with the United States in mid-March, with teams from both countries addressing critical issues including economic security, rules of origin, and complementary trade actions. This head start has positioned Mexico more favorably as the July 1 review deadline approaches.
Vague Agreement Language Creates Uncertainty
CUSMA, which replaced NAFTA in 2020 with a 16-year term, includes a provision requiring a joint review on its sixth anniversary. However, the language surrounding this review process remains deliberately vague, creating substantial uncertainty about how negotiations will unfold between the three North American partners.
When questioned about Canada's timeline for entering bilateral talks with the United States, Minister LeBlanc responded that discussions would begin "in due course," noting that Canada's negotiating team is now fully assembled with the recent appointments of businessman Mark Wiseman as Canadian ambassador to the U.S. and veteran public servant Janice Charette as chief trade negotiator.
Mounting Hostility in Washington
Duncan Wood, a visiting fellow for North America at the Woodrow Wilson International Center for Scholars, described Canada's current negotiating position as "nowhere for now" as the United States positions itself for bilateral discussions ahead of the summer's trilateral meeting.
"Going to the bilateral route, which the United States has done with Mexico, does speed things up, because you're no longer talking about three countries at the table, you're talking about just two," Wood explained.
Wood emphasized that the United States and Mexico have been building their economic relationship since President Trump's election victory, resulting in "quite high levels of trust right now on the economic portfolio." In stark contrast, Wood reported "an enormous amount of hostility" toward Canada as a negotiating partner in Washington.
Recent Canada-China Deal Adds to Tensions
Prime Minister Mark Carney's recent agreement with Beijing has further complicated Canada's position. The deal, which grants Chinese electric vehicles market access to Canada in exchange for lowered Chinese tariffs on Canadian canola exports, has been viewed negatively by members of the U.S. administration.
"What I've heard directly from people within the administration is that they think Canada is absolutely shooting itself in the foot," Wood revealed. "They believe that this will result in the hollowing out of the Canadian auto industry, and they don't, weirdly, they don't seem to understand how something like canola can be a fair trade for access to the auto sector."
As the clock ticks toward the July 1 review deadline, Canada faces mounting challenges in its trade relationship with the United States, with provincial alcohol restrictions, perceived negotiating delays, and recent international agreements all contributing to what analysts describe as a hostile environment for the upcoming CUSMA negotiations.
