On March 13, Canada’s Governor General Julie Payette granted Royal Assent to the CUSMA legislation. A three-month period will now begin to give the three countries time to work out the regulations that will govern the mechanics of the agreement.
“The CUSMA trade agreement will mean continued benefits for Surrey’s business community, such as our manufacturing and agriculture industry sectors to remain free from tariffs and red tape, as well as economic confidence in doing business with the US and Mexico,” said Anita Huberman, CEO, Surrey Board of Trade.
While the agreement falls short of what North American businesses sought, it generally maintains tariff-free access for Canadian products, retains labour mobility provisions, strengthens intellectual property protections, and ensures Canada has access to the most crucial aspects of dispute settlement.
“There are opportunities to harness trade, reduce barriers and spur economic activity. However, much work remains to be done to educate our business community on the new CUSMA.”
“Now that this is done, finalizing a softwood lumber agreement needs to be a priority to help BC’s and Canada’s forestry sector – which also affects Surrey forestry and lumber businesses.”
A summary of the CUSMA trade deal includes:
DAIRY FARMERS
Canada did grant more access to US producers. The CUSMA will grant them a 3.6% portion of Canada’s domestic market. It also gets rid of a recently implemented milk-pricing policy. Canadian Prime Minister Justin Trudeau has promised dairy farmers will receive compensation for the trade deal.
TECH COMPANIES AND ONLINE SHOPPERS
The new agreement raises duty-free shopping limits to $100 (USD) to enter Mexico and C$150 ($115 USD) to enter Canada without facing import duties – well above the $50 previously allowed in Mexico and C$20 permitted by Canada. That’s good news for online shoppers in Mexico and Canada – as well as shipping firms and e-commerce companies. Consumers are also expected to benefit from faster shipping. Canadian retailers had argued against raising the limits, fearing a more generous exemption could place them at a disadvantage.
STEEL AND ALUMINIUM SUPPLIERS
In June, the US government imposed tariffs on steel and aluminium imports from key allies in Europe, as well as from Canada and Mexico. It was suggested by the US government that the tariffs against its direct neighbours were tied to progress achieved on the NAFTA negotiations. Now those tariffs will be dealt with separately. Mr. Trudeau says removing the tariffs remains a priority for both Canada and Mexico.
BIG PHARMA
Pharmaceutical companies won 10 years of protection for patents on certain types of treatments known as biologics, as well as an expanded scope of products eligible for protection. Canada agreed to extend its monopoly period from eight years to 10 years and Mexico from five to 10 years. Still, that protection is shorter under current US law, which protects drug patents for 12 years. There are concerns this part of the agreement will raise the cost of drugs in Canada and affect its national healthcare system.
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Anita Huberman, 604-634-0342, anita@businessinsurrey.com
