The new trade agreement between Canada, United States and Mexico has been highly covered in news since 2018. If you have been keeping track of the discussions surrounding the new trade deal, you have probably heard the words USMCA or CUSMA before. Since 1994, NAFTA (North American Free Trade Agreement) has been the trade agreement deal between the three countries; however, due to various doubts and concerns raised by both the public and trade specialists, there was a demand to renegotiate parts of the agreement between the three nations.
After months of publicized negotiations, Canada, the United States and Mexico signed the new agreement at the Buenos Aires G20 Summit in 2018. While Mexico officially ratified the agreement in June of 2019, the United States ratified the deal this past January. The agreement has just been ratified in Canada on March 13, 2020, officially making the trade pact official and replacing the NAFTA agreement.
How will the USMCA trade deal affect Canadians?
Deals like USMCA will inevitably come with benefits and drawbacks for all of the nations involved. Here are some important aspects to note about the new trade deal for different Canadian industries:
- Automotive Industry: there will be zero tariffs on cars made with 75 per cent North American parts. This is meant to stimulate the economy, as more parts will be manufactured and sold within North America. However, it is possible that this change might generate an increase in automobile prices.
- Dairy: The USMCA deal intends to finally settle the dairy dispute between Canada and the United States.
- Pharmaceuticals: The new deal aims to hold down drug prices through limiting patent protections and eliminates requiring pharmaceutical companies to authorize patents for new uses of known drugs.
- Digital Trade: When the NAFTA deal was introduced, digital technology wasn’t a vital part of people’s lives. Businesses and consumers did not rely on the internet as much as they do today. Online services, streaming services and social networks are all included in the new trade agreement.
Although the terms might seem daunting, the USMCA trade deal has not changed the parts of NAFTA that Canada was comfortable with. As business owners, consumers and citizens, the best thing we can do is prepare for the changes. If you have any more questions and concerns about the new USMCA deal, please don’t hesitate to contact us at email@example.com.
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