For the past 15 months, there have been numerous stops, starts, negotiation tactics, and tough talk between the U.S., Canada, and Mexico, but a refreshed trade deal in principle is done.
The United States, Mexico, Canada Agreement (USMCA), once signed, would replace the decades-old North American Free Trade Agreement and provide, among other things:
- A dispute resolution process (formerly Chapter 19 of NAFTA) to remain in place.
- The U.S. gets access to 3.6 per cent of Canada’s dairy market.
- Auto tariff exemptions for 2.6 million Canadian autos exported to the U.S., far exceeding the current export rate of 1.8 million.
- Duty-free purchases through e-commerce jump to $150 from the current $20.
As tensions mounted between Canada and the U.S. over the deal, the Manitoba Chambers of Commerce (MCC) spent the summer touting the importance of the trade relationship and the need for cooler heads to prevail. We also sent letters to the Prime Minister and Minister Freeland urging them to get back to the table and negotiate a fair deal for all parties to agree on. With news of the deal, MCC is thrilled to see the tentative agreement in place that will provide businesses on both sides of the border with greater certainty moving forward.
While the deal moves through the signing phase, there are still questions remaining, the largest of which is the continued tariffs facing Canadian steel and aluminum. The hard lesson learned from this process is Canada must never again allow itself to be overly-dependent upon one trading partner. We must continue to diversify our markets to protect ourselves from unpredictable and unfair actions in the future.
To learn more about the tentative deal, please click here.