Economy February 26, 2026

Canada Signals Cautious Optimism as USMCA Review Nears

Trade minister says private trilateral talks are 'not discouraging' as Ottawa prepares formal negotiations with the U.S.

By Ajmal Hussain
Canada Signals Cautious Optimism as USMCA Review Nears

Canada’s minister overseeing trade with the United States described private conversations among Canada, the U.S. and Mexico about the upcoming USMCA review as not discouraging. Ottawa is readying formal negotiations with Washington ahead of the treaty’s renewal deadline of July 1, 2026. The minister noted the existence of bilateral arrangements within the pact and said he is not pessimistic about eventual bilateral sectoral deals with the U.S.

Key Points

  • Private trilateral talks between Canada, the U.S. and Mexico about the USMCA review were described as not discouraging - impacts trade dialogue and negotiation confidence.
  • Canada is preparing to start formal negotiations with the United States as part of the USMCA review process, which must be completed by July 1, 2026 - impacts policy planning and bilateral engagement.
  • The minister noted existing provisions for bilateral arrangements under the USMCA and said he is not pessimistic about the possibility of bilateral sectoral arrangements with the U.S. - impacts how sector-specific issues may be handled.

Canada’s minister responsible for trade with the United States said on Thursday that private discussions between the governments of Canada, Mexico and the United States about the upcoming review of the USMCA were "not discouraging."

The minister made the remarks during a question-and-answer session held in Toronto, where officials and observers are watching developments as the three partners approach the scheduled review process. Canada is preparing to enter formal trade negotiations with the United States as part of that review, which must be completed ahead of the agreements renewal date of July 1, 2026.

In his comments, the minister emphasized that under the USMCA there have always been opportunities for bilateral arrangements between the three countries. He said he is not pessimistic about the potential for bilateral sectoral arrangements with the United States to emerge from the review process.

Those remarks reflect Ottawas posture as it moves from private, preparatory conversations toward a formal negotiation phase with its largest trading partner. The ministers characterization of the private talks as "not discouraging" signals a level of guarded optimism within the Canadian delegation while the timetable toward renewal remains in place.

Beyond restating that formal talks with the U.S. will begin as part of the review, the minister highlighted the precedent under the pact for sector-specific or bilateral approaches between partners. He stopped short of predicting any particular outcome, instead describing the prospect of future bilateral sectoral arrangements with the United States in cautiously positive terms.

As the three governments move forward, the ministers public remarks indicate Canadas intention to engage in the review process and to pursue negotiation channels that can address sectoral matters while working under the framework of the USMCA. The formal negotiations with the United States form a key part of the process leading to the renewal deadline of July 1, 2026.

Risks

  • The outcome of private discussions remains uncertain despite being characterized as not discouraging - this uncertainty affects trade-related sectors and cross-border commerce.
  • Formal negotiations must be concluded before the July 1, 2026 renewal deadline; the timing and progress of talks introduce uncertainty for stakeholders awaiting final terms - this affects businesses and policy planning tied to the agreement.
  • While the minister expressed optimism, the eventual emergence of bilateral sectoral arrangements with the U.S. is not guaranteed, leaving sector-specific interests uncertain - this particularly affects industries reliant on cross-border regulatory or trade arrangements.

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