New Trade Deal With Canada-US-Mexico To Replace NAFTA
A new free trade agreement, the United States-Mexico-Canada Agreement (USMCA), was announced on Sunday, September 30, and is intended to replace the existing North America Free Trade Agreement (NAFTA) which governs over $1 trillion in trade between Canada and the United States and Mexico.
Details of the complex trade agreement are still being released, but highlights of the new deal include:
- A dispute resolution process (formerly Chapter 19 of NAFTA) remains in place.
- The U.S. gets access to 3.6 per cent of Canada’s dairy market.
- Tariffs on steel (25 per cent) and aluminum (10 per cent) remain under Section 232 national security grounds.
- 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 increase to $150 from the current $20.
Through its involvement in the Canadian Chamber of Commerce and BC Chamber of Commerce, the Burnaby Board of Trade has supported free trade between Canada, Mexico and the United States, and advocated for a stable trade agreement to be struck that provides certainty and clarity to the business sector.
On the new USMCA, the Canadian Chamber of Commerce has called it “a relief for our members who have been searching for much-needed clarity and predictability in the relationship with our NAFTA partners” but is advocating for a strategy of greater trade diversification for Canada. Read the CCC’s USMCA/NAFTA news release