(Commonwealth) – Canada will this week announce that it is starting formal consultations on the North American Free Trade Agreement following a United States declaration that it would start its review of the agreement. The U.S. move, taken on Tuesday, formally triggers a review of the Canada–United States–Mexico Agreement (CUSMA) in its first five years of existence. This action will send a strong signal to the government of Canada that official discussions for signing and resuming the agreement can begin early in 2026.
The United States has left no doubt that even as it goes ahead with such negotiations, there will not be a broad trade or security agreement with Canada anytime soon. Washington initially had in mind negotiating a broader deal encompassing commerce, energy, automotive collaboration, nuclear defence, and others, but political imperatives now disallow such breadth. America’s consultative process will offer American stakeholders a chance to give comments to the federal government as policymakers begin draughting their response to an updated CUSMA.
The deal was sealed in U.S. President Donald Trump‘s first presidential term. Mexico, Canada, and the United States are to collectively renegotiate the trade agreement on July 1, 2026, the sixth anniversary since it went into effect. Before that, each country is required to hold public consultations focused on seeking comments from industry, trade unions, and other interest groups. The U.S. action to begin its own consultations puts the clock ticking on what was supposed to be a months-long review and public comment process.
Canadian Finance Minister François-Philippe Champagne said Canada has been cooperating with the United States along the way on issues of economics and security even as the ongoing challenge presented by U.S. trade policy persisted. Canada boasted of its security and economic partnership to further heighten bilateral ties in response to Washington’s tariffs on imports from Canada, which included a 50 per cent tax on steel and aluminium exports. Ottawa went the extra mile to meet the U.S. administration to promote Canadian interests and soften the economic punch of these tariffs.
Prime Minister Mark Carney has not been idle either, as much as he could work on crafting Canada’s bid for the future review of CUSMA. Carney initially signalled that his government was in pursuit of a new economic and security agreement with America to further enhance collaboration beyond the current trade agreement. But since the U.S. had been indecisive about a grander plan, Canada has tried to negotiate a string of mini-deals to assist most impacted industries by U.S. tariffs.
Carney said that officials are already preparing for the 2026-triggered review of the CUSMA and are in regular contact with their counterparts from the United States. He described his relationship with United States President Donald Trump as constructive and consistent but said the relationship remains strained by problems and setbacks. Despite these problems, the two governments are leaving channels of communication open as they attempt to bargain through trade tensions and locate ground for opportunities for incremental agreements.
The upcoming consultations represent an important benchmark in North American trade relations development. Canada shall need to consult industry, labour, and other groups before deciding priorities for the 2026 review. Relief from tariffs and rules of origin related to automotive manufacturing sectors, as well as cooperation on energy, shall be prominent issues in the consultations. At the same time, the United States shall also be formulating its priorities for negotiating with regard to domestic political imperatives and economic interests.
Canada’s agenda during the process will be to secure Canadian access to the Canadian market for Canadian exports, to mitigate the impact of U.S. tariffs, and to ensure that any changes in the CUSMA enhance economic relations with Mexico and the United States. While dreams of a grand new security and commerce pact have faded, the upcoming review is an opportunity to update the pact with the new realities of North American business and win additional concessions for Canadian business.
