Canada's Ambassador to the United States Kirsten Hillman, pictured in 2023, is ending a term of more than six years on Feb. 15.Dave Chan/The Globe and Mail
The departing Canadian ambassador to the United States said it’s unclear whether Ottawa, Washington and Mexico City will be able to conclude a scheduled review of the continental USMCA free-trade deal this year.
U.S. President Donald Trump’s administration has already signalled it wants changes to the United States-Mexico-Canada Agreement, including for all three members to more closely align on external trade policy toward other countries.
Kirsten Hillman is ending a term of more than six years as Canada’s envoy to the United States on Feb. 15. She served as acting ambassador in 2019 and officially took over in early 2020. The career diplomat will be replaced by investment banker Mark Wiseman, a friend of Prime Minister Mark Carney.
The trilateral trade deal, also known as CUSMA, calls for all parties to signal whether they want to renew by July 1.
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The envoy said she couldn’t forecast whether this scheduled review – broadly expected to turn into a renegotiation – will be finished by the end of 2026.
“It’s very difficult to predict,” Ms. Hillman said in an interview Friday. “This is the first time that we’re using this review process. And so there’s no history to go on, to know exactly how that’s going to run.”
As well, she said, the U.S. approach to trade has shifted. Since taking office, Mr. Trump has imposed a slew of protectionist tariffs on Canada and Mexico.
“The trade policy in the United States, in particular, is changing very significantly, and so understanding what that means for our CUSMA review and for our broader economic relationship with the United States – that adds more uncertainty.”
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The USMCA says all three countries are supposed to meet this year and by July 1, 2026, confirm in writing whether they intend to renew the pact – which would extend the deal another 16 years. If all parties do not confirm renewal in writing, then a 10-year countdown begins to the expiry of the deal, with yearly reviews until 2036. Countries are still free to renew the deal at any time.
But Ms. Hillman said she doesn’t think Canada, the U.S. and Mexico need to make such a renewal announcement on July 1, and could defer any commitment on the future until they feel ready to do so. She added that she’s talked to her American and Mexican counterparts.
“If we’re not ready to make that decision that day, the three of us, then we make it on another day, right?,” she said. “We are masters of our own treaty and if we want to, if we’re not quite ready, then we will simply keep working on it.”
Such an approach to the July 1 deadline could lower the pressure to get a deal by that point.
The stakes for a successful renewal of the USMCA are extraordinarily high for Canada. Not only does it provide the framework for more than $1-trillion in annual Canada-U.S. trade, it has also become a shield against U.S. tariffs. Mr. Trump has currently exempted products that comply with free-trade pact rules from his 35-per-cent “fentanyl” levy. This exemption covers more than 90 per cent of Canadian exports to the U.S.
U.S. Trade Representative Jamieson Greer has previously raised the possibility of replacing the three-way free-trade agreement with Canada and Mexico with two separate deals: one between Canada and the United States, and another between the U.S. and Mexico.
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Ms. Hillman could not say whether the USMCA would be replaced by two bilateral deals, but said businesses prefer one trilateral deal.
Asked if she believed there would still be one three-way deal in five years, Ms. Hillman replied: " I think it’s what the three business communities want. That’s my answer.”
However, the envoy said there is significant support for the USMCA, as Washington heard during its recent public consultations to inform this review of the agreement.
The process of renewing the deal may end up being difficult, but Ms. Hillman said she has confidence it will happen.
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“This will probably continue be a path that is not completely straight and not without certain distractions,” she said.
“I’m not able to say, you know, we will conclude it in X amount of time and in such and such a way. What I can say is: I think we can take confidence and comfort from the fact that the U.S. government is saying there is broad support for this agreement. They are hearing from their constituents.”
Mr. Trump recently criticized Canada for rekindling relations with China, threatening to impose 100-per-cent tariffs on Canadian goods if Ottawa signs a trade agreement with Beijing.
Ms. Hillman said she doesn’t believe Ottawa will have to choose between a deeper economic relationship with China and a successful renewal of the USMCA. After all, she noted, it’s not like Washington has to choose between the two trading partners. “The United States has a massive trading relationship with China,” she said, noting this is worth more than US$438-billion annually.
“The question is about balancing our relationships in a pragmatic way that’s good for our country.”
With a report from Mark Rendell