Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeNewsEconomyCanada calls for CUSMA renewal, but economists see no quick end to uncertaintyTrade deal needed to lift nation out of economic slump, but negotiations expected to run past deadline You can save this article by registering for free here. Or sign-in if you have an account.Economists say the ball is in America's court in trade deal negotiations. Photo by Getty ImagesCanada formally called for the renewal of its trilateral trade deal with the United States and Mexico on Tuesday, but economists expect the uncertainty surrounding the pact will continue to weigh on the economy.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorIn a letter to his U.S. and Mexican counterparts, Intergovernmental Affairs Minister Dominic LeBlanc wrote that Canada “recommends renewal” of the Canada-U.S.-Mexico Agreement (CUSMA) for the next 16 years. The letter was sent a month ahead of the July 1 deadline when countries must decide if they want to renew or renegotiate the deal.However, Canadian and U.S. officials have said negotiations are likely going to extend past the deadline, and the U.S. is pushing for a series of annual reviews over a 10-year period instead of a 16-year extension. Both options are allowed under current CUSMA regulations.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“This agreement is highly beneficial to each of our countries and to the integrated North American economy,” LeBlanc’s letter read.It comes as Canada is already grappling with economic sluggishness that dates back to the start of the U.S.-Canada trade war in early 2025.“It’s pretty clear that the trade war is front and centre of Canada’s economic slump. We need steady progress towards re-signing CUSMA,” said Bank of Montreal senior economist Sal Guatieri.“In the worst case scenario, if the U.S. leaves CUSMA, then we’d be hit with pretty broad hefty tariffs. Canada is going to aim for that not to happen, but it’s going to take a while. We don’t think they’ll come to an agreement this year.”Randall Bartlett, deputy chief economist at Desjardins Group, said Canada may want a quick resolution, but “the ball is largely in the U.S.’ court,” especially with the potential for a multi-year review process.“That entrenches the uncertainty, instead of what should have been an impetus to get to an agreement,” Bartlett said.He added that the Canadian government needs to focus on keeping the trade deal’s compliance exemption clause, especially since 80 to 90 per cent of Canadian exports to the U.S. are CUSMA compliant.“If CUSMA compliance exemption is withdrawn, that would be a big problem for Canadian exporters and our economy will be severely negatively impacted,” he noted.Guatieri said if CUSMA is renewed for another 16 years, it would improve business confidence in Canada. This could then lead to increased business investment and labour productivity, especially if the money is invested in technology that will make work more efficient.Keeping the compliance exemption clause would also give the majority of Canadian goods duty-free status when exported to the U.S., he added. This would bring relief to impacted industries, along with lowered tariffs on goods like aluminum, lumber, steel, copper products and motor vehicles.“Businesses just want to see steady progress towards renewing the agreement again. As long as there’s progress, it would clear up some of the uncertainty that’s been hanging over the heads of Canadian businesses,” Guatieri said.“Business investment in Canada and the economy will pick up on a more sustained basis (if CUSMA is renewed), getting back to fairly healthy economic growth of around two per cent in 2027.”Bartlett, however, has a different view of what that growth will look like.“Business investment is going to be focused more around trade-supporting infrastructure in markets outside of the U.S., as opposed to traditional manufacturing…. We need to see private sector investment in Canada and federal government measures that attract that investment to make sure the Canadian economy continues to grow,” he noted. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.