By John M. Weekes

May 2, 2026

July 1, 2026, is an important date for the future of the Canada-U.S. Mexico Agreement (CUSMA), but there is considerable confusion as to exactly what is supposed to happen on that date. Some think it is the final deadline for negotiations to save the agreement from termination. Others think it is the starting date for a complete renegotiation of the CUSMA.

I am not directly involved in the evolving review of the CUSMA, but I do have experience in trade negotiations, including as Canada’s chief negotiator for the original NAFTA negotiations.

I will not offer comments on the detail of what is going on going on today. Rather, I will focus on issues relevant to any big negotiation and comment on some matters relating to the review of the CUSMA that are in the public domain.

The CUSMA Review

The text of CUSMA itself (Article 34.7:  Review and Term Extension) provides the only authoritative description of what will happen on Canada Day.

“This Agreement shall terminate 16 years after the date of its entry into force (July 1, 2020), unless each Party confirms it wishes to continue this Agreement for a new 16-year term.” In other words, the agreement will continue for a further 10 years after July 1 regardless of what happens on that date, unless one of the parties decides to exercise its right to withdraw from the agreement which is possible at any time with six months written notice.

Importantly, Article 34:7 provides that the ministers of the three countries “shall meet to conduct a ‘joint review’ of the operation of this Agreement, review any recommendations for action submitted by a Party, and decide on any appropriate actions.”

It is clear from various public statements from senior officials and political leaders in the three governments that some kind of renegotiation is likely and that real negotiations would formally begin sometime after July 1.

Furthermore, statements by senior officials in the three governments can reasonably be interpreted as indicating that all three governments would like to see the CUSMA continue in effect, although the United States in particular has identified certain areas in which it would like the agreement to be “improved”, perhaps through the use of bilateral protocols particularly where a particular matter is of a bilateral nature.

We seem to be watching a bad movie the second time around. In his first term, Trump made clear he wanted to rebalance the NAFTA to make it fairer for the United States. Canada and Mexico would be expected to make concessions, but the United States would make none. The Trump administration seems to still have this view.

There have been bilateral discussions among the three CUSMA partners at senior levels about trade issues in recent months. There has been probing of positions and a lot of posturing – not unusual behaviour in high-stakes trade diplomacy.

Risks in Moving Quickly

Canada, of course, has been interested in securing relief from the tariffs the United States has imposed on Canadian exports of steel, aluminum, automobiles, and forest products using the preposterous and insulting justification that these exports pose a security threat to the United States.

Some Canadians suggest that Canada should seek to quickly conclude a bilateral deal with the U.S. to eliminate or lessen the burden of these illegal tariffs. But Canada has already made a deal with Trump to provide duty-free treatment to almost all trade. It’s called the CUSMA. So, does it really make sense to enter a new deal with less favourable terms of access than the CUSMA, in the hope that this time Trump might keep his word?

Other parties, including the U.K., the EU and Japan, with a lesser stake in the American market than Canada and Mexico, have negotiated deals to try to salvage some of their access to the U.S., but they have not fared very well. They have agreed to terms of access to the U.S. less favourable than what they already had under the WTO, and they have had to pay for this meagre result with new tariff concessions to the U.S.

By the way, Canada couldn’t use this technique because we already accord duty-free treatment to all U.S. exports except for dairy, eggs and poultry. These deals seem to have little constraining effect on Trump and have led to buyers’ remorse.

It was announced April 28th by the EU Commission that Sabine Weyand, for seven years the EU’s top trade official, would be leaving her post on June 1. The reason is that she refused to back up her bosses claim that the deal the EU concluded with Trump was compliant with WTO rules. In fact, she told the European Parliament in September that the deal did not fulfill WTO conditions.

In response to these developments, Karl Falkenberg, a former senior official in the EU’s Trade Directorate, is reported in the Financial Times April 28 as saying that “The idea of an FTA where one side raises tariffs and the other drops them is nonsense.”

Another important factor for Canadian officials to take into account is how American trade policy will evolve over the next couple of years. Clearly, Trump’s protectionist trade policy is losing support in the U.S. Is now the best time to lock in a deal unfavourable to Canada’s interests?

Canada should engage constructively with Trump’s trade team but not be in too much of a hurry until we have a better sense of what American trade policy will look like in the longer term. This should not be difficult. Even Jamieson Greer, Trump’s USTR, has acknowledged that there is not enough time before the American midterm elections in November to conclude any negotiation resulting from the CUSMA review.

Strategy, Tactics, and Technical Discussions

So far, Canada has done a good job in setting out its strategic approach, making clear that we would like to see an extension of the CUSMA but also diversifying our trade and economic relations to be less dependent on the United States. Concurrently, the government is taking steps to boost growth by strengthening the domestic economy and establishing a stronger basis for trade diversification by ensuring that Canadian businesses are able to produce what the world wants.

It is appropriate that such broad objectives be stated clearly at the highest level and that there be no equivocation about their strategic importance. Trade negotiations are very complex endeavors and there will be many tactical considerations to be managed. On some detailed matters, positions evolve overtime but should always remain consistent with the broad strategic objectives.

On these tactical matters, it may be better to have officials take the lead. Positions taken by even senior officials can be changed, if necessary, without political embarrassment to the government. However, it is much more complicated to reverse a position taken by the prime minister or a senior minister.

Mexico and the United States have recently initiated what they have publicly called “important technical discussions” dealing with various CUSMA matters, including “strengthened rules of origin for key industrial goods”. Canada is not engaged in these and that may pose risks for Canada.

The Mexicans and the Americans may well begin to develop drafts of what changes might be made to the automobile rules of origin — an area also of great importance for Canada. Once negotiations are fully engaged, Canadian negotiators may face an uphill battle to effect any changes in such drafts that may be necessary to protect the Canadian automobile industry. Canadian negotiators were involved in a very similar situation in the original NAFTA negotiations, and it was a hard slog to salvage the situation.

In any trade negotiation, most of the negotiating takes place in private, informal discussions among the parties. These discussions are often described as technical to dampen public speculation about what is going on.

In fact, any trade negotiation is mainly about very technical mind numbingly boring issues of detail. But the results of those negotiations can have important consequences for important constituencies in the participating countries.

Managing expectations should be a high priority of those leading the negotiating effort.

John M. Weekes, who was Canada’s chief negotiator for the original NAFTA and ambassador to the WTO, is a member of the Expert Group on Canada-U.S. Relations, and a fellow of the Canadian Global Affairs Institute.