The process leading up to next year’s scheduled review of the Canada-United States-Mexico Agreement on free trade (CUSMA) has officially begun — and the future of the North American economy is at stake.
The U.S. Trade Representative on Wednesday kicked off 45 days of public consultations leading up to a public hearing in November. That process, enshrined in the trade pact, will help inform the formal review of CUSMA scheduled for next July.
Canada-U.S. Trade Minister Dominic LeBlanc’s office said Wednesday that Canada will launch its own public consultations “in the near future.”
The review is looming as U.S. President Donald Trump’s global trade war has unleashed multiple waves of tariffs and upset international economies.
For now, most goods from Canada and Mexico entering the U.S. are avoiding tariffs because of CUSMA.
However, that could change if Trump seeks major changes to the agreement, or even withdraws from it altogether.
“At best, we could see some adjustments that will be more favourable to the U.S. than either Canada or Mexico,” said Gary Hufbauer, an economist and non-resident senior fellow at the Peterson Institute for International Economics.
The USTR’s notice sets a 45-day deadline from its publication for the public to submit comments on CUSMA — including its operation, implementation, “any issues of compliance,” recommendations for action, impacts on investment and economic strategies.
That means comments will be accepted until Nov. 1. That’s also the deadline for requests to appear at a public hearing set for Nov. 17.
Industry leaders, small businesses, labour unions, workers and other members of the public are all being urged to participate in the public hearing.
Get daily National news
Get the day’s top news, political, economic, and current affairs headlines, delivered to your inbox once a day.
The hearing will continue into the next business day “if necessary,” the USTR notice says.
The formal review of CUSMA is expected to begin on July 1, 2026, according to the USTR. That’s six years after the trade pact came into force, a timeline enshrined in the agreement itself.
LeBlanc’s office did not give a timeline for Canada’s upcoming consultations, but said the government will engage with “Canadian industry leaders, provinces and territories and Indigenous partners.”
The statement said the engagements, “which will build on consultations undertaken in 2024, will enable us to gather valuable feedback from Canadians.”
Hufbauer said that, while public consultations have helped inform reviews of trade agreements in the past, the U.S. CUSMA process may simply be “theatre.”
“The trade policy is almost totally centred in the White House,” he said, with minimal influence from administration officials like U.S. Treasury Secretary Scott Bessent and U.S. Commerce Secretary Howard Lutnick.
“I’m skeptical that anything submitted will make any substantial difference at all in terms of how President Trump approaches the file.”
Under Article 34.7 of CUSMA, during the review, all three countries will have to agree on whether to extend the agreement for another 16 years, with a new joint review set no later than in six years’ time.
If one country does not agree to the 16-year extension, then joint reviews will have to be held every year until a longer extension can be agreed to.
Trump, Lutnick and U.S. trade representative Jamieson Greer have highlighted several issues with CUSMA that they want to address, particularly closing loopholes exploited by China to enter the North American market. Canada and Mexico have indicated they share those concerns.
But the Trump administration has also taken aim at Canada’s supply management system, which sets high tariff rate quotas on foreign dairy products to protect the domestic industry.
Ottawa recently passed legislation aimed at ensuring supply management isn’t targeted in future CUSMA reviews, and Prime Minister Mark Carney has promised it won’t be on the table in the upcoming talks.
Accusations of Canadian softwood lumber “dumping” by the U.S., as well as the rules surrounding automobile supply chains, could also be raised.
Economists have predicted that Trump, as he has done with other countries in updating their free trade agreements with the U.S., could try to adjust tariffs on certain goods higher within CUSMA.
Article 34.6 of CUSMA states that any country can withdraw from the agreement at any time by providing written notice to the other parties, with the withdrawal taking effect six months later.
“If a party withdraws, this agreement shall remain in force for the remaining parties,” the text reads.
That means Trump’s blanket tariffs on Canada and Mexico would apply to all goods entering the U.S.
It remains unsettled law as to whether a U.S. president can unilaterally withdraw from a trade agreement without approval from Congress, which had to pass legislation to enact CUSMA. The Canadian and Mexican parliaments did the same.
If Trump withdraws from CUSMA, this means the matter will likely be challenged in lawsuits and could end up in the U.S. Supreme Court.
Business groups in all three countries are underscoring the importance of retaining and improving CUSMA, rather than scrapping it, to remove the trade uncertainty unleashed by Trump’s tariff policies.
“CUSMA is too important to our prosperity – and to North America’s global competitiveness – to allow it to unravel,” Candace Laing, president and CEO of the Canadian Chamber of Commerce, said in a statement.
“We cannot afford to find ourselves back in this same position next year.”
