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Trade experts weigh future of USMCA ahead of six-year review

A group of North American trade policy experts say there are growing concerns that China will be a factor as the U.S. Mexico-Canada trade agreement nears its six-year review.

Sharon Bomer Lauritsen, with AgTrade Strategies says she doesn’t expect the U.S. to consider a full renegotiation of USMCA.

“Both candidates have said they’re going to renegotiate auto rules because they don’t want China to benefit from this agreement by being able to put investment or sending cars to Mexico and then having those cars come up to the U.S.”

She says the Office of the U.S. Trade Representative will likely begin the review process as early as next spring.

Former Mexico Vice Minister for Foreign Trade and Ansley International Consultants CEO Juan Carlos Baker says the amount of Chinese investment in Mexico is less than 1% of the total foreign direct investment over the past decade. He says any discussions about China need to involve other regional trade objectives.

“If that is national security, we might as well be speaking about our North American industrial policy or North American agricultural policy,” he says. “That discussion cannot be had in a vacuum of not considering other items as well.”

Carlo Dade with Canada West Foundation says when Canada imposed a 100% tariff on electric vehicles, China threatened retaliation on canola.

“We don’t have $28 billion to hand out to U.S. farmers for siding with the U.S. So there’s going to have to be some agreement about shared sacrifice in combating China and shared aid or shared ability to weather that,” he says.

Dade says the U.S. also added a provision in the initial trade agreement, barring Canada from negotiating with China, the signed a phase one trade deal which he says favored U.S. agricultural exporters over Canadian exporters

“You can’t go on treating your friends and allies in this manner, taking short term agricultural gain if you want us to remain on side with you in the existential fight that is China,” he says.

The comments were shared Tuesday during a panel discussion on global trade hosted at the Nebraska Innovation Campus in Lincoln, Nebraska.