On July 1, 2020 the Canada-United States-Mexico Agreement will be implemented.
“The implementation of CUSMA will add opportunities to help the economy recover during these unprecedented times,” said Anita Huberman, CEO, Surrey Board of Trade. “Surrey has the greatest number of manufacturers in BC contributing to national and international supply chains, but what they need sooner rather than later is detailed regulations and government guidance in order to properly implement the rules.”
“The effective date of July 1 only gives businesses in all three countries two months to ensure they will be compliant with the new rules – and this is challenging during COVID-19 times.”
Some businesses have transferred production to personal protection equipment, which is a good thing, but is also a challenge when owners need to think about the future at the same time. It is only within the last few days that governments have started to issue guidance in some critical areas such as customs and rules of origin.
The new agreement contains significant changes to rules of origin, agricultural market access, intellectual property, digital trade, financial services, labour, and numerous other sectors.
“And let’s not forget that the forest industry is still in a perilous situation due to tariffs. We need the Softwood Lumber Agreement to be a priority too. Many Surrey businesses in this sector are waiting.”
“With the implementation of CUSMA, we must still heed the advice of our provincial and federal health experts. Border restrictions are uncertain right now as well. The Surrey Board of Trade’s role is to ensure that communication and education to our 6,000 member contacts is consistent on this important economic measure.”
A summary of the CUSMA trade deal includes:
Canada did grant more access to US producers. 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.
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.