Canada and the United States are set to initiate formal discussions in mid-January 2024 to review the crucial United States-Mexico-Canada Agreement (USMCA), as confirmed by the office of Canadian Prime Minister Mark Carney. This move kicks off the process for the trade pact's scheduled review in 2026.
Key Meeting Set for Mid-January
Prime Minister Mark Carney informed provincial leaders that Dominic LeBlanc, Canada's lead official for US-Canada trade relations, will meet with American counterparts in the middle of January to launch these formal discussions. The announcement was made in a statement released late on Thursday following Carney's meeting with the premiers of Canada's provinces to update them on the trade dialogue.
The USMCA, originally negotiated during US President Donald Trump's first term, includes a clause that allows for a potential renegotiation in 2026. The upcoming talks are the first step in that extensive process. This development comes after a period of trade tensions, including a halt in talks in October after an anti-tariff advertisement by the Ontario government, and earlier disputes over Trump's controversial statements regarding Canada.
Major Trade Issues on the Table
The discussions are expected to cover a wide range of contentious topics. Carney revealed that just before the October halt, the two nations were close to a deal on sectoral tariff relief for industries like steel, aluminum, auto, and lumber. These tariffs have significantly impacted these key sectors of the Canadian economy.
Furthermore, US Trade Representative Jamieson Greer has highlighted specific irritants that will be central to the review. US concerns regarding Canadian policies on dairy products, alcohol, and digital services are set to be major points of negotiation. Carney described these as part of a "much bigger discussion" about continental trade.
Canada's Strategic Leverage and Economic Stakes
The trade relationship is immensely significant for both nations. Canada is one of the world's most trade-dependent countries, sending over 75% of its exports to the United States. Daily, nearly USD 3.6 billion worth of goods and services cross the border. Canada is the top export destination for 36 US states.
Canada also holds substantial strategic leverage. It supplies 60% of US crude oil imports and 85% of US electricity imports. It is the largest foreign supplier of steel, aluminum, and uranium to the US and possesses 34 critical minerals and metals vital for US national security, which the Pentagon is actively seeking.
However, Prime Minister Carney emphasized that American access to these critical minerals is not guaranteed. He stated it is a "potential opportunity" for the US but part of a larger trade discussion, noting that other global partners, like those in Europe, are also keenly interested.
Carney and the provincial premiers have agreed to reconvene in person in Ottawa early in the new year to coordinate Canada's approach as these pivotal talks with the United States get underway.
