Canada Falls Behind as U.S. Advances Trade Talks with Mexico Ahead of CUSMA Review

As North America approaches a critical review of its trilateral trade agreement, the United States has signaled that negotiations with Canada are lagging, while discussions with Mexico are progressing steadily.

U.S. Trade Representative Jamieson Greer revealed in a recent interview that Washington has made more headway in talks with Mexico regarding potential changes to the Canada-U.S.-Mexico Agreement (CUSMA). According to Greer, while discussions with Canada are ongoing, they have not advanced at the same pace.

“We’re moving forward with Mexico, but Canada is trailing behind,” Greer stated, underscoring a growing imbalance in negotiation momentum.

Canada’s Trade Minister Dominic LeBlanc met with Greer in Washington earlier this month in what many viewed as a positive step toward restoring dialogue. Relations between the two countries had cooled after U.S. President Donald Trump paused negotiations last year following a dispute involving a Canadian advertisement referencing former President Ronald Reagan. Despite the recent meeting, no formal announcement has been made regarding renewed negotiations with Canada.

Originally negotiated during Trump’s first term to replace NAFTA, CUSMA has played a key role in protecting Canada and Mexico from the full impact of U.S. tariffs. However, Canada continues to face separate American tariffs on key sectors such as steel, aluminum, automobiles, lumber, and cabinetry.

Adding further pressure, the U.S. recently launched investigations under Section 301 of the Trade Act of 1974 into multiple countries, including Canada, citing concerns over forced labor in supply chains. This move is widely interpreted as a step toward reintroducing stricter tariffs following a U.S. Supreme Court decision that limited presidential tariff authority.

Meanwhile, Greer is set to hold formal negotiations with Mexico’s Economy Secretary Marcelo Ebrard, with a focus on tightening rules of origin. The U.S. aims to ensure that goods traded under the agreement are genuinely produced within North America, rather than routed through Mexico from countries like China or Vietnam.

Greer has also criticized Canada for maintaining internal trade barriers, including provincial restrictions on U.S. alcohol, which he argues complicate bilateral negotiations.

The future of CUSMA itself remains uncertain. Trump has questioned the agreement’s relevance and suggested it may have outlived its usefulness. One proposal under consideration is replacing the trilateral pact with two separate bilateral agreements between the U.S. and its neighbors.

The upcoming review presents three possible paths: extending the agreement for another 16 years, withdrawing from it, or opting for a middle ground that triggers annual reviews and prolonged negotiations for up to a decade.

Despite the uncertainty, both Canada and Mexico have expressed a strong preference for preserving the existing three-country framework. Canada has recently strengthened ties with Mexico through a trade mission, while a Mexican delegation is expected to visit Canada in the coming months signaling ongoing efforts to maintain regional cooperation amid shifting U.S. priorities.