US Starts Decade-Long USMCA Review After Declining Extension

The United States is expected to formally notify Mexico and Canada on Wednesday that it will not seek a 16-year extension of the U.S.-Mexico-Canada Agreement, initiating a decade-long review process that could lead to the trade pact's expiration in 2036. The decision, anticipated from the Trump administration, activates a sunset clause in the 2020 agreement, beginning a six-year review period and setting the stage for potentially protracted negotiations over its future.

Trade leaders from the three nations are scheduled to meet virtually on July 1 for a mandatory joint review. While the U.S. move does not terminate the agreement, it triggers a mechanism requiring annual consultations for the next ten years if no consensus is reached on a full extension. The pact will remain in force during this period, with the ultimate expiry date set for July 1, 2036. Officials have stressed that the review date is not a cliff, and trade will continue under existing terms.

The core of the impending negotiations centers on U.S. demands for significant revisions, particularly stricter rules of origin for the automotive sector. Washington is pushing to substantially increase the share of vehicle...