Mexico Confident in CUSMA Trade Agreement Extension Despite Trump's Skepticism

Mexico's Stance on CUSMA's Future

Mexico's Economy Minister Marcelo Ebrard has voiced strong confidence in the extension of the Canada-United States-Mexico Agreement (CUSMA), also known as USMCA, despite recent remarks from former US President Donald Trump that questioned the trade deal's future. Ebrard insisted on Thursday that the CUSMA remains 'firmly intact' and that the three signatory countries will 'close a deal to extend it'. He highlighted that the treaty is currently in its review phase, with a deadline of July 1, 2026, for completion. The Minister noted that 'good progress on all the points that concern each of the parties' has been made.

Trump's Comments and the Review Mechanism

Ebrard's statements come in response to Trump's recent comments during a visit to a Ford factory in Dearborn, Michigan, where the former president suggested there was 'no real advantage' for the US in renewing the deal and that he doesn't 'really care about it'. Trump has also indicated that the US could allow CUSMA to 'expire'.

The CUSMA agreement, which replaced the North American Free Trade Agreement (NAFTA) in 2020, includes a significant provision known as the 'sunset clause' or 'review and term extension' mechanism. This clause mandates a joint review by the three nations every six years to assess the agreement's impact, relevance, and effectiveness. The first such mandatory review is scheduled for July 1, 2026, marking the sixth anniversary of the agreement's entry into force.

The Importance of CUSMA for Mexico

For Mexico, the CUSMA agreement is a cornerstone of its economy. Ebrard emphasized that the treaty will 'survive' and expressed optimism about Mexico's economic future under President Claudia Sheinbaum. He pointed out that Mexico has become the United States' main trade partner, with trade between the two nations growing by more than 37% thanks to the USMCA. Mexico, along with Canada, initially prioritized long-term stability during the agreement's negotiation, which the 16-year term aims to provide.

Future Outlook and Potential Implications

If all three countries agree during the 2026 review, the CUSMA can be extended for another 16 years. However, if an extension is not agreed upon, annual reviews would then take place until 2036, at which point the agreement would terminate if no consensus is reached. The presence of this sunset clause has introduced a degree of uncertainty for businesses, particularly those with significant cross-border supply chain investments, such as the automotive manufacturing sector. Analysts anticipate that negotiations surrounding the review process could extend late into 2026.