The reality of what is happening with CUSMA...
Other media outlets are catching up to what I've been telling you.
It’s good to see other media outlets catching up on the reality of what is happening in the CUSMA talks, or lack thereof.
For months I’ve been listening to talking heads on TV and reading reporters and columnists in print telling me that nothing changes on July 1 when it comes to CUSMA. If you’ve been following me here or reading my columns in the Toronto Sun, you know that I’ve been saying that everything could change on July 1, 2026.
Here’s the headline from The Globe and Mail today.
Over the past several days, I’ve seen several media outlets report what I’ve been telling you for weeks or months.
It seems that unlike most people reporting on this matter, I actually read the agreement which lays our three possibilities for CUSMA come July 1.
All parties agree to extend this for another 16 years
One or more parties gives six months notice that they are withdrawing from the deal, effectively cancelling it
We continue the deal for the remaining 10 years and the deal is subject to annual reviews
CUSMA came into effect on July 1, 2020 and runs for 16 years, unless one of the parties withdraws. Trump has said that he wants to withdraw, but I wouldn’t bet on that happening, which I will explain in a moment.
It’s no surprise that Donald Trump was trashing CUSMA while on the tarmac in Europe this past week. It is part of his Art of the Deal negotiating style, beat up your opponent, then leave the door open to a deal.
It’s what he did a week ago when he went on a rant for several minutes in the Oval Office about how awful CUSMA is, how he doesn’t need or want anything from Canada, but ended by saying that they are talking with us and might sign a deal.
CUSMA will continue, but things will change…
Canada’s position on CUSMA is that we want option #1, renew for another 16 years. The Americans clearly don’t want that, they have signalled that to us publicly and privately.
Which means, despite Trump talking about withdrawing from the agreement, we are likely headed towards option #3, which Prime Minister Mark Carney was speaking about on Thursday when he was in Vancouver.
Don’t take Carney’s word for it though, Jamieson Greer, Donald Trump’s U.S. Trade Representative was before a House Committee in Washington back in April when he spoke about the agreement. Greer was clear, they wouldn’t rubber stamp CUSMA’s extension, meaning the 16 year move of option #1, but he did speak about the importance of the agreement to the American economy even as he said some things need to change.
Listen to the part where he describes the deal as having load bearing walls.
To me, that means we stay in the deal for another 10 years but that the deal is now subject to annual reviews.
This will lead to greater uncertainty for the Canadian economy. Yes, we still have access to the American market, but it is not as stable as it should be and each year we will review the deal.
This will not be good for attracting long term investment.
What if Trump disappears…
It seems many Canadians, especially Carney supporters, believe that if they just wait Trump out that everything will be better.
That’s not a view that I support.
First off, if Trump were replaced as president tomorrow, there is a good chance that he’d be replaced with someone even more protectionist than he is. The last good president we had when it comes to free trade was George W. Bush.
Both Bush and Bill Clinton before him were generally free traders, since Bush left office, we’ve had Obama, Trump, Biden, Trump and each administration has been increasingly more protectionist.
If Trump were replaced with J.D. Vance as the Republican president, very little would change on the trade file. Vance is very much the new breed of protectionist Republican who doesn’t hold the free trade views of Ronald Reagan.
If the Democrats were to replace Trump, then we could end up with Kamala Harris, who voted against CUSMA when she was a Senator or AOC who has threatened to rip up the agreement if she were in power.
Marco Rubio on the Democrat side or Gavin Newsom on the Democrat side would be better for Canada, but it isn’t clear they could win.
Batra’s Burning Questions on trade…
This week on Batra’s Burning Questions, our weekly video panel, I chatted about CUSMA and Carney’s hot mic moment with Trump on the issue of Chinese EVs.
Marco Rubio is not a Democrat and he is very much "America First" ...as he should be. It's too bad we have a Globalist Elitist WEF PM who is "Brookfield and Bankers" first. Get the Vaseline out Liberals...it will be more than your elbows up.
You wrote that a series of 1 year renewals will cause "greater uncertainty" which "will not be good for attracting long term investment."
Very true.
However there will be another problem - potential foreign investors will look at Canada as governed by people who are a such a toxic mix of stupid, selfish, stubborn and ignorant of basic economics that they cannot make a deal with Trump when many others are.
Nobody wants to invest in a country governed by such people even if it appears to be stable.