US Official: Canada-US Trade Partnership Is Cornerstone of Economic Future

The U.S. ambassador to Canada and the Canadian ambassador to the U.S. said trade cooperation between the two countries -- each is the other's top trading partner -- is crucial, but their tone on the NAFTA replacement was slightly different.

The trade agreement, known as USMCA in the U.S., and CUSMA in Canada, is up for a sunset review in 2026. Wilson Center Canadian Institute Director Christopher Sands asked how the trade community should view the U.S. trade representative's remark that the three countries shouldn't be too comfortable as they approach the review because discomfort is needed to prod the countries to be willing to make changes.

U.S. Ambassador David Cohen said, "The bottom line is -- the U.S. government believes that CUSMA or USMCA is working quite well. We do think it’s the gold standard" for trade agreements.

He said at the time of review, the countries should reflect on how the agreement's working, and he said it's not a static agreement.

He suggested USTR Katherine Tai's comments had been misinterpreted in the press, and said, "there is no signal being sent that the United States does not continue to value USMCA."

But even as he called the free-trade deal the "cornerstone of our regional economic future," he also seemed to give it a weak endorsement, saying, "It's too early to say the USMCA isn't working."

Canadian Ambassador Kirsten Hillman offered no ambiguity in her assessment. "On USMCA/CUSMA there is no question that the agreement is working. Period," she said at a Wilson Center event March 12.

In the same question, Sands had asked if the U.S. would make changes in its treatment of Mexican and Canadian autos before 2026, since it lost a dispute a year ago, and has made no moves toward complying with the panel's recommendations.

In Tai's earlier talk (see 2403070067), she rejected the framing that the U.S. is not compliant with the dispute finding.

She said each country balances the legal process' conclusions with each being a sovereign country. Withdrawing concessions -- which no country has yet done in response to lack of compliance -- is "intended to be an inducement to finding a solution," which she said could be compliance with the ruling, or an accommodation. It was "never meant to be something you can shove down the throat of the other side," she said.

"I think the conversation within the USMCA on autos has to be something larger than what has happened in this dispute," Tai added. "Those rules of origin, and our lack of agreement on what those rules of origin mean is an important component," she said, but not the most important one.

Cohen did not directly respond to Sands' question about that dispute, just saying that "there are decisions that we don't like; there are decisions Canada hasn’t liked."

The two ambassadors praised bi-national cooperation on mining and processing critical minerals needed for the green energy transition. Hillman said Canada produces more than 60 metals and minerals, and two-thirds of those are on the U.S. critical materials list.

"That cooperation is really bearing fruit," she said.

Cohen noted that two Canadian companies have new processing projects in Alaska and in Alabama. He said Chinese and Russian dominance in mining, refining and processing must be addressed, and that's why both Canada and the U.S. are offering financial incentives to spur expansion in these sectors.