Good deal or Bad deal?

This week Canadians learned that a draft agreement has been reached between the United States, Mexico and Canada with ongoing renegotiation of the NAFTA deal. 

The new agreement, subject to ratification is called the United States, Mexico and Canada Agreement otherwise referred to as the USMCA.

This agreement involved a significant number of concessions from Canada from the previous NAFTA agreement.

Some of those concessions are listed down below.

Dairy: the United States received increased access to the Canadian dairy sector- roughly 3.6%. The Liberal Government has promised it will compensate Canadian dairy farmers for their losses.

Auto sector: Canada has agreed to a maximum number of vehicles that can be produced in Canada (2.6 Million) and be exported to the United States without duty. As well, to avoid duties, 75% of the parts used in the manufacture of the vehicles, must originate from USMCA partner countries. 

Drugs: Canada has agreed to extend patent protections for biological pharmaceutical drugs to 10 years. This change is widely expected to increase the cost of some prescription drugs.

Copyright Laws: Canada has agreed to extend the terms of a copyright from 50 years up to 70 years. A change that many experts have called a “capitation on Canada’s copyright policy”.

De Minimis: this is a term that represents the amount of goods a person can bring across the border without being hit by duties.The basic exemption when crossing the border in person will increase to $40 of US goods up from the current $20. For online shipment (e-commerce) the level is increased to $150 CAD.

Trade autonomy: one more alarming concession that has many concerned in Ottawa is language that may restrict Canada's ability to negotiate a trade deal with a "non-market" country, for example, China. This is an emerging topic requiring more clarification.

BC Wine: on a topic closer to home another concession is that BC Grocery stores current selling only BC wines will be required to also sell wines from the United States…a problem that many thought could occur and made their concerns known when this provincial program was first put into place.

What has not changed is that an independent arbitration panel will still be used in the event there is a trade dispute. Many view preserving this as one of the few key wins for Canada in this new agreement that shall have a 16 year expiry date with an option to renew for another 16 year term.

Things not addressed in the new USMCA:

United States tariffs on Canadian produced steel and aluminum remain in effect as do the punitive tariffs on Canadian

Softwood Lumber.

In addition the United States “Buy American” provisions also remain in effect.

Is this a good deal or a bad deal for Canada? 

That is the question for Canadians to decide upon and will also serve as my question for this week:

Do you think the many concessions that the Liberal government made, went too far or is this simply the price to be paid for a new North American trade agreement?

I welcome your comments and can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711.
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