CALGARY – An agreement for the newly unveiled North American trade deal (United States-Mexico-Canada Agreement, or USMCA) is good news for Canadian beef, pork and grain producers who rely on the U.S. market, and for both domestic and foreign investors seeking certainty in Canada. Every negotiation involves give and take and there remains much to digest and examine in the details of the agreement in the coming days – including 12 side letters. Canada’s negotiators have worked hard to reach a fair deal, and send a strong message that Canada stands for win-win trade.

Canada West Foundation President and CEO Martha Hall Findlay and and Director of the Trade & Investment Centre Carlo Dade are available to comment on the USMCA deal, including:

• What does giving the U.S. more access to Canada’s dairy market mean? The U.S. had already been granted some access under the former TPP, which it pulled out of – we need to see the details of how much additional access is being promised, and on what terms. Two additional questions will be key: what compensation will be offered to the dairy, poultry and egg producers? And will this encourage, finally, the ultimate dismantling of our supply management system, which still prevents us from exporting to world markets.  

• Moving ahead with the agreement grants certainty for both domestic and foreign investors who have been waiting on the agreement before committing to new investments in Canada. At a time when Bill C-69 and the Trans Mountain pipeline challenges have discouraged investment in Canada, news of agreement on USMCA is welcome.

• Outside of dairy and seasonal agricultural producers, agriculture was not a contentious issue in the negotiations and progress had been made on issues such as updating Canada’s grain grading system – a long-standing request by American farmers that was not opposed by Canadian farmers. For Canada’s farmers and ranchers it is good news that progress on agriculture was not held hostage by other issues.

• But, the USMCA is of limited benefit if Canada is still under threat from tariffs like those imposed on national security grounds on steel and aluminum and threatened on autos. While the agreement does contain side letters on the Americans’ use of these tariffs, the letters only address their use with autos; steel and aluminum are not addressed. In addition, the letters give Canada a 60 day extension before tariffs are imposed not an exemption from their imposition. Conclusion of negotiations with the U.S. will hopefully reduce the use of Section 232 tariff measures by the U.S. administration.

• There remains a long list of actions that the administration has to take including conducting and submitting studies to Congress. A new deal will not be ready for a vote before a new Congress is seated in 2019. The deal will need 51 votes in the Senate where the Republicans currently hold only 50 seats and are unlikely to gain many more in the upcoming mid-term elections.

• An agreement with our largest trading partner is welcome, but especially in the turbulent times ushered in by the Trump administration, Canada must look to new trade horizons. Trade elsewhere has gotten easier, particularly in Europe (with CETA) and parts of Asia (with CPTPP).

“One of the first rules of business is to not rely too heavily on any one customer. Canada must finally heed this – it’s time to take advantage of the growing markets around the world, particularly in Asia. As for dairy, opening up some of our domestic market while still preventing our industry from expanding elsewhere because we insist on keeping supply management is problematic. Maybe this will be a wake-up call for the industry.”

– Martha Hall Findlay, President and CEO

” On the whole, the agreement appears, at first glance, to have met most of what Canada needs; the most important being certainty for business and investors. But, as with any agreement this complex, the devil is in the details. The potential for the Americans to limit Canada’s ability to negotiate a trade agreement with China is a good example of a small detail buried in the 34 chapters, 2 appendices, 12 side letters and at least 15 annexes. It’s going to take some time go through, analyze and digest all of this.”

– Carlo Dade, director, Trade & Investment Centre

Further reading

What Now policy brief: Supply management myths, busted

What Now policy brief: Canada and the U.S. – Beyond NAFTA

Op-ed: What does a ‘give’ to the U.S. on dairy look like?