Will NAFTA become USMCA – proof will be in the pudding

By Harry Siemens – Just before midnight on Sunday officials of the three countries negotiating the now-defunct North American Free Trade Agreement signed in 1994 all claiming victory with a new agreement – United States-Mexico-Canada Agreement (USMCA). I guess first off nothing free about the new agreement, and what was free in the old one I’m not sure either other than not paying nearly as much duty coming home from another shopping trip.

Many people and organizations who claimed to know how good or bad the new agreement will be quick to respond and write their versions. I don’t have one yet; the proof will be in the pudding I guess is as good a response as any.

For me, and for everyone concerned to have the bickering, accusations and whatever else this elongated event generated, sometimes childish behaviour other times downright ugly threats stop is a good start and a positive.

According to the Canadian Federation of Independent Business (CFIB), small and medium-sized enterprises can breathe a sigh of relief with the progress of NAFTA negotiations welcoming USMCA but cautions that the federal government must work to address critical issues affecting Canadian businesses as it finalizes the details.

“We are glad to see a new agreement in place, and we congratulate Foreign Affairs Minister Freeland and her team on their successful negotiations. Small businesses need stability in international trade so they can plan for growth and the future,” said CFIB President, Dan Kelly. “CFIB is particularly pleased that the new agreement includes a dedicated small business chapter.”

The CFIB released said although the new agreement is a welcome sign of certainty for many businesses, some firms, including small retailers and producers in supply managed industries, have remaining concerns that need addressing.

Affected supply managed sectors will need a detailed transition plan, adequate compensation and assurance that relief measures will work for smaller producers referring to the dairy and poultry sectors, and will be interesting to see how those sectors will respond.

The new $150 de minimis limit for duty-free online purchases and $40 sales tax exemption may put small Canadian retailers at a competitive disadvantage. CFIB calls on the government to ensure stronger enforcement of the rules by Canada Post and work with smaller retailers on implementing other relief measures.

“While it is good news for small firms that Canada will have more secure access to its largest trading partner, the past year highlights that we need to continue to diversify our markets and empower small businesses to succeed at home and abroad,” said Corinne Pohlmann, CFIB’s senior vice-president of national affairs. CFIB is monitoring the development of the agreement closely and will release further analysis when more details are available.

John Feldsted, political consultant and strategist from Winnipeg said ultimately; this looks like a lot of political back-slapping over very little.

“The aluminum and steel tariffs remain in place. We will still suffer American protectionist tariffs countering their view of ‘anti-dumping”, said John. “There is no good reason to rename the trade agreement, but renamed should have been the Canada-Mexico-United States agreement (CAMUS) named after the French philosopher, author and journalist Albert Camus who contributed to the philosophy known as absurdism. That neatly sums up the past year of reports on negotiations we have suffered.”

Well I know where John is coming from, and my gut feeling tells me the same, but I’m prepared to give the negotiators the benefit of the doubt and wait for the pudding.