Canada, the United States and Mexico are two years away from a mandatory six-year review of the Canada-U.S.-Mexico Agreement (CUSMA) — the trade deal that replaced NAFTA in July 2020. That may seem a long way off, but the review will be upon us sooner than we expect.
The federal government and some business associations claim that Canada should seek a smooth rollover of CUSMA rather than risk another potentially messy renegotiation. This is wishful thinking for two reasons.
First, no matter who’s in office in Washington in 2026, Canada and Mexico are bound to face pressure from U.S. political and industry voices to reconsider CUSMA trade rules in areas such as dairy market access, energy, agriculture and food policy, automotive rules-of-origin and, possibly, digital trade.
The second reason a smooth CUSMA rollover is unlikely is because that was never the intention of the Trump administration in adding the sunset clause containing the review to the new NAFTA (in Article 34.7). The Biden administration concurs. “The whole point [of the review] is to maintain a certain level of discomfort,” said Katherine Tai, the U.S. trade representative, in March.
Either a Democratic or Republican administration would use the CUSMA review as leverage to fix perceived imbalances in the agreement affecting U.S. farmers, firms and workers. This is not a reason for Canada to panic. In fact, there are good reasons for Canada to also seek changes to CUSMA that would make it more worker- and climate-focused.
All three North American governments acknowledge that international trade has had unequal impacts on women, racialized workers and Indigenous peoples. Trade’s contribution to biodiversity loss and climate change is apparent and could be managed through more enlightened rules in CUSMA.
Importantly, the geopolitics of trade and the embrace of subsidies and industrial policy in North America have also shifted considerably since CUSMA came into force only four years ago. Does CUSMA help or hinder efforts to bolster North American manufacturing and supply chain resiliency? Can the treaty’s rules-of-origin for automotive trade be tightened to support North American production of electric vehicles?
The Canadian Centre for Policy Alternatives (CCPA) has just published a collaborative report assessing the functioning of CUSMA to date and proposing 25 ways to build on the environmental, inclusive trade and worker-centred novelties in the new NAFTA.
For example, we should strive to broaden the scope and improve the enforceability of CUSMA’s labour provisions, including the innovative rapid-response, facility-specific labour mechanism that the U.S. has invoked 23 times (and Canada once) to contest core labour rights violations in Mexican workplaces.
The central limitation of the rapid-response mechanism is that it only effectively applies to Mexico, even though significant violations of the right to freedom of association and collective bargaining happen in Canada and the U.S. What’s more, the novel labour enforcement tool does not address other critical labour rights affected by trade, such as health and safety, migrant work and gender-based violence.
The success of CUSMA’s new labour protections should inspire North American governments to enhance the agreement’s environmental provisions, too, since they are weak. Reviews of potential environmental violations take years and do not necessarily lead to action. Putting time limits on those reviews and requirements on states to abide by environmental panel decisions would be a start.
Other aspects of CUSMA could also be made more inclusive and worker-focused under the right circumstances. For example, let’s put full gender and Indigenous Peoples chapters back on the agenda. And let’s fix CUSMA’s digital trade chapter so it is not hopelessly slanted in the interest of privacy-abusing big tech firms.
The digital trade rules in CUSMA are out of date with current U.S. thinking on the need to better regulate artificial intelligence, protect children from harmful online algorithms and adults from invasive workplace surveillance technologies and crack down on tech monopolies. Canada and Mexico should work with the U.S. to expunge the agreement’s ban on data localization and restrictions on accessing source code.
The three CUSMA parties should also find the courage to completely dismantle the vestiges of investor-state dispute settlement (ISDS) between Mexico and the United States. The ISDS regime, which allows investors to sue governments in private tribunals for policies that affect their profits, is incompatible with the achievement of human rights and the Paris Climate Agreement goals.
Canada and the U.S. were wise to remove ISDS for Canadian companies in the U.S. and vice versa. Leaving the corporate rights regime intact in Mexico, even in a limited form, creates unacceptable risks and an unacceptable power imbalance in the treaty.
Progress in any of these areas during the CUSMA review may depend on who’s in power in the three countries in 2026. Still, Canada would be wise to come to the table with a solid list of proposals as leverage in a potentially stressful negotiation. Any review should include ample opportunities for consultation with civil society stakeholders in the three countries and should not be left to trade negotiators or corporate lobbyists.
Stuart Trew is a co-author and project leader of Making the Most of the CUSMA Review and the director of the Trade and Investment Research Project at the Canadian Centre for Policy Alternatives.
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Our Dairy Supply Management provides us with less expensive fluid milk and a variety of other products than the USA on average. And no taxpayer subsidies like US dairies receive thru direct payments and subsidized feed.