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Five things to know about the new U.S.-Mexico-Canada Agreement

U.S. gets more access to Canadian dairy market, and preserving Chapter 19, are at the top
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Dairy cows walk in a pasture at Nicomekl Farms, in Surrey, B.C., on Thursday August 30, 2018. (THE CANADIAN PRESS/Darryl Dyck)

After more than a year of talks, Canada finalized a revamped free-trade deal with the United States and Mexico.

The new deal, dubbed the U.S.-Mexico-Canada Agreement, or USMCA, will replace the North American Free Trade Agreement.

Here are five elements of the new deal:

GETTING MILKED: Trump frequently railed against Canada’s dairy industry throughout the trade talks, calling it unfair to the United States. Five key takeaways from the new U.S.-Mexico-Canada Agreement, a move roundly criticized by domestic dairy farmers. The access given to the U.S. is slightly more than the 3.25 per cent conceded in the Trans-Pacific Partnership trade deal with Pacific Rim countries.

TARIFFS AND TAUNTS: Trump joked that the deal wouldn’t have been made without tariffs, specifically on Canadian-made steel and aluminum, which prompted tit-for-tat retaliatory tariffs from Canada on a number of U.S. goods. And as negotiations dragged on, Trump threatened to slap Canada’s auto industry with significant tariffs — a threat that now appears avoided. The deal says the first 2.6 million Canadian autos exported to the U.S. will be exempted from tariffs, a figure well above the current export rate of 1.8 million. But the steel tariffs remain in place and Trump has given no indication when he might lift them.

ATTENTION, SHOPPERS: The trade deal raises the threshold for duty-free purchases online from American retailers. When the deal takes effect, shoppers won’t pay duties until their online purchase is worth more than $150 — a significant bump from the current threshold of $20. But there’s more: Language in the agreement no longer requires companies — such as Google or Microsoft, for example — to put a data centre in Canada in order to do business here, meaning Canadians’ information could be housed south of the border and subject to American laws.

INTELLECTUAL PROPERTY: The rules around copyright and intellectual property are set to change. On copyright, the length of time after a creator’s death that they maintain rights will move to 70 years from 50. On pharmaceuticals, new biologics — made from natural sources — will be copyright protected for 10 years, up from the current eight, an extension that analysts believe will benefit U.S. companies over Canadian firms.

RESOLVING QUARRELS: Two of Ottawa’s key sticking points throughout the talks involved holding on to dispute-resolution tools and decades-old cultural exemptions that leave Canada in control of its own media content, from broadcasting to publishing to music. The USMCA preserves what was known as Chapter 19, which allows independent panels to resolve disputes over tariffs and duties, as well as Chapter 20, the government-to-government dispute settlement mechanism. Chapter 11, which allows companies to sue governments over perceived mistreatment, has been dumped.

Out with NAFTA, in with USMCA: Canada inks new trade deal

The Canadian Press

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