In the wake of the newly proposed Canada-United States-Mexico Agreement, I took part in a webinar at EDC on How Small Business Can Sell to the U.S. You can watch it on-demand to hear the views of fellow panelists, including Mark Fisher, President and CEO of the Council of the Great Lakes Region; Robert Pelletier, EDC’s Chief Representative in the U.S.; Stephen Tapp, EDC Deputy Chief Economist and Director of Economic Research & Analysis; and Chris O’Donnell, an Account Manager with the Commercial Markets and Small Business division at EDC. If you’re looking for a quick overview of how the CUSMA might affect your business plans south of the border, this webinar is an excellent place to start.
Is the new deal a big deal?
The short answer: Yes and no. On the one hand, it’s a big sigh of relief, as it reduces the uncertainty surrounding the NAFTA renegotiations that we’ve been living with since the 2016 presidential election. As Stephen Tapp mentioned, the Trade Confidence Index (TCI) results for spring 2018 indicated a full 6% of Canadian exporters were practicing some type of “investment hesitation” in light of the seemingly endless NAFTA discussions. Interestingly enough, the study also noted that despite these jitters, Canadian exports were up by 15%. So, while some businesses took a U.S. timeout, others carried on, both in the U.S. and in many other markets further afield.
On the other hand, for the most part, the new deal does little more than preserve what we already had in place, while giving us some room to build out around the edges. True, the U.S. has more access to our dairy—similar to what was negotiated for CETA and CPTPP—but supply management has been preserved. So too was Chapter 19’s dispute settlement system. Progress was made in digital trade, with all countries recognizing the expediency of not exacting duties on items sold digitally and agreeing to some limits on data localization requirements. The de minimis thresholds for tax-free and tariff-free treatments for express shipments to Canada went up. And we now have a standard agreement on regulatory co-operation subject to dispute settlement, which goes beyond CPTPP and CETA.
The agreement doesn’t cover government procurement between Canada and United States, but both countries will continue to be bound by their WTO Government Procurement Agreement commitments and the 2010 Canada-U.S. Agreement on Government Procurement is still in effect. Furthermore, like the CPTPP, the agreement breaks new ground by addressing issues of corruption that can often stymie the efforts of new entrants, including SMEs to enter new markets...
This was excerpted from a 4 December 2018 EDC blog by Mark Warner, International Trade Lawyer, MAAW Law.