It is unlikely that the review of the Canada-U.S.-Mexico free trade agreement, also known as CUSMA, will yield immediate results, Canada’s former chief trade negotiator Steve Verheul said on Thursday, adding that the exemptions under the deal make the trade war a “bit less of a crisis.”
The agreement, which dictates virtually all trade between the three countries, is up for review by July.
“I am not entirely convinced anything is going to come out of the CUSMA review, at least in the foreseeable future or the short term,” Verheul said at an event.
Ottawa and Washington’s positions on key trade issues are “still too far apart,” he said.
“The U.S. is looking for Canada to make concessions on some sensitive issues and Canada is looking to see the U.S. move on big issues — steel, aluminum and autos, breaches of the agreement that we already have,” he added.
Last month, Prime Minister Mark Carney said Canada has its own trade irritants with the United States, including American tariffs on Canadian steel and aluminum.
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The exemptions for most CUSMA-compliant goods from U.S. President Donald Trump’s tariffs have meant that the trade war has become “less of a crisis,” taking pressure off negotiators, Verheul said.
“We have the CUSMA exemption still in place. A high proportion of goods are trading duty-free into the U.S. That’s taking a lot of heat off all three countries. It’s making it a bit less of a crisis, so that doesn’t put pressure for a fast result,” he added.
The bilateral talks between the U.S. and Mexico are also not getting “quite as far as some are saying,” Verheul said, adding that “they’re in a similar position” as Canada when it comes to trade with the U.S.
Last month, reports suggested the United States was seeking concessions ahead of a renegotiation of the CUSMA free trade agreement.
Carney told reporters in April that Canada would not make any more trade concessions to get to the table with the U.S. on trade talks.
He acknowledged, though, that both sides had “trade irritants” that needed to be ironed out.
“There’s two parties in a negotiation. We’re not sitting here taking notes and taking instruction from the United States,” Carney told reporters.
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