The highly anticipated review process for the Canada-United States-Mexico Agreement (CUSMA) is officially underway, and the economic stability of North America hangs in the balance.

On Wednesday, the U.S. Trade Representative announced a period of 45 days of public consultations leading up to a significant public hearing scheduled for November. This consultation phase is mandated by CUSMA itself and is set to shape the formal review that will take place next July.

Canada Joins the Dialogue

In a strategic move, Canada’s Trade Minister Dominic LeBlanc announced that Canada will soon launch its own public consultations, inviting feedback from stakeholders across various sectors.

The timing couldn’t be more crucial, as U.S. President Donald Trump’s ongoing trade war has introduced a host of tariffs, casting uncertainty over international economies. Currently, CUSMA allows most goods from Canada and Mexico to enter the U.S. tariff-free, but this could be jeopardized if Trump pushes for substantial changes or decides to withdraw from the agreement.

Potential Changes Looming

Experts like Gary Hufbauer from the Peterson Institute for International Economics caution that the upcoming review might favor U.S. interests disproportionately. He warns of the possibility that any adjustments made could ultimately benefit the U.S. more than Canada or Mexico.

The open consultations allow the public to submit comments on various aspects of CUSMA by November 1. Those interested in voicing their opinions at the November 17 hearing are encouraged to make their voices heard, as the forum will extend into the next business day if necessary.

A Year of Reckoning Ahead

Under Article 34.7 of CUSMA, all three countries must agree on a possible 16-year extension during the review process, with another joint review scheduled no later than in six years. If any country disagrees with this extension, annual reviews will be obligatory.

Trump, U.S. Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer have pinpointed crucial issues, including addressing loopholes exploited by international players like China. While Canada and Mexico share these concerns, the U.S. has also expressed a strong desire to reform Canada’s supply management system, particularly concerning dairy products.

The Stakes Are High

Recent Canadian legislation aims to safeguard the supply management system during future CUSMA negotiations, with Prime Minister Mark Carney asserting that it will not be open for debate.

Additionally, potential disputes regarding Canadian softwood lumber and automotive supply chains could emerge as hot topics during this review.

What if Trump Withdraws?

Should Trump opt to withdraw from CUSMA, the implications would be profound. Under Article 34.6, any country can exit the agreement with written notice, leading to heightened tariffs on goods entering the U.S. This possibility raises legal questions about the president's authority to unilaterally withdraw without congressional approval.

If tensions escalate, this move could spark legal battles and potentially land in the U.S. Supreme Court.

Businesses Call for Stability

As the review process unfolds, business leaders across North America emphasize the critical need for CUSMA to remain in effect and improve, rather than be discarded altogether. Candace Laing, president and CEO of the Canadian Chamber of Commerce, underscored the agreement's importance to overall prosperity and international competitiveness.

"We cannot afford to find ourselves back in this same position next year," she stated, highlighting the urgent need for stability in trade relations.