Question Period Note: CUSMA Review

There is uncertainty regarding how the United States will approach the upcoming CUSMA review in a context of unjustified tariffs imposed on Canadian and Mexican imports.

• We recognize the possibility that the United States may push to review and revisit CUSMA earlier than July 2026.
• Global Affairs Canada has already conducted public consultations through the Canada Gazette and is coordinating efforts with all relevant federal government departments, finalizing its thorough preparation for the review.
• The federal government is also meeting on a regular basis with provincial and territorial governments to exchange views and discuss strategy.
• Canada is ready to engage the United States and Mexico on the review, including in areas of potential adjustment, at any time.

· CUSMA includes a commitment to jointly review the Agreement starting on the sixth anniversary of its entry into force, a forum that also provides the opportunity for the Parties to make specific proposals to amend the Agreement. There is uncertainty regarding how the United States will approach this upcoming joint review in the context of unjustified tariffs on Canada and Mexico. In the America First Trade Policy Memorandum, President Trump instructed the United States Trade Representative (USTR) to initiate domestic consultations regarding CUSMA, assess the impact of the Agreement on the United States, and then report back on its' findings by April 1, 2025. USTR's recommendations could include that the joint review be initiated earlier than its scheduled date (July 1, 2026), and that the Agreement be revisited in specific areas.
· Canada is ready to engage the United States and Mexico on the review, including areas of potential adjustment, at any time. Priorities for Canada will be to preserve market access into the United States, to target areas that are in Canada's interest to modernize (e.g. economic security), and to secure a prompt 16-year extension of the Agreement's term.
· President Trump has focussed primarily on trade deficits and border security, which, while not directly linked to CUSMA, are likely to affect eventual negotiations. USTR Jamieson Greer highlighted automotive and aerospace rules of origin, and dairy tariff rate quotas as key issues to be tackled during a CUSMA review. Canada's digital services tax has also faced criticism. The United States may also push for strengthened forced labour import prohibitions and new restrictions on Chinese companies operating in North America.
· President Sheinbaum signaled, in the context of the joint review, that she would like to see a more balanced usage of the CUSMA rapid response labour mechanisms to also protect workers' rights in the United States and Canada.

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