Bill C-4, Canada-United States-Mexico Agreement Implementation Act - February 18, 2020

A. Standing Committee on International Trade (CIIT)

43rd Parliament – First Session
December 5, 2019 to present

Order for questioning:

The time allotted for the questioning of witnesses in the first round be as follows: Conservative Party – six (6) minutes, Liberal Party – six (6) minutes, Bloc Québécois – six (6) minutes, New Democratic Party – six (6) minutes; that the order and time allotted for the questioning of witnesses in the second round be as follows: Conservative Party – five (5) minutes, Liberal Party – five (5) minutes, Bloc Québécois – two and a half (2.5) minutes, New Democratic Party – two and a half (2.5) minutes, and that, if time permits, further rounds shall repeat the pattern of the first two at the discretion of the Chair.

Witnesses typically have 10 minutes each for their opening remarks, but the Chair will often request witnesses to keep opening remarks to 5 minutes if appearing alongside other witnesses providing opening remarks.

Mandate:

The House of Commons Standing Committee on International Trade studies and reports on matters referred to it by the House of Commons. The Committee can also initiate studies of subjects falling within its mandate. As a permanent committee established by the Standing Orders of the House of Commons, the Committee may be asked to comment on legislation, departmental activities and spending, and other matters under its jurisdiction. The Compendium of the House of Commons Procedure contains additional information on the mandate and powers of standing committees.

The general subject area of the Committee includes the following:

• International trade policy, including trade and investment liberalization, as well as Canada’s economic relationship with other countries;
• Canadian international competitiveness, as well as the effects of global competition on Canadian business and the Canadian economy; and
• The global trade and investment environment, including the World Trade Organization, international markets and regional trade blocs.

The federal departments and agencies under the Committee’s direct scrutiny are:

• Foreign Affairs, Trade and Development Canada (international trade component)
• Export Development Canada
• Canadian Commercial Corporation

Biographies

Colin Carrie
(Conservative Party of Canada—Oshawa, Ontario)
Critic for Canada/US relations and Federal Economic Development Agency for Southern Ontario

Randy Hoback
(Conservative Party of Canada—Prince Albert, Saskatchewan)
Critic for International Trade

Simon-Pierre Savard-Tremblay
(Bloc Québécois—Saint-Hyacinthe-Bagot, Québec)
Critic for International Trade

Sukh Dhaliwal
(Liberal Party of Canada—Surrey – Newton, British Columbia)

Chandra Arya
(Liberal Party of Canada—Nepean, Ontario)

Daniel Blaikie
(New Democratic Party—Elmwood-Transcona, Manitoba)
Critic for International Trade

Randeep Sarai
(Liberal Party of Canada—Surrey Centre, British Columbia)

Hon. Judy Sgro
(Liberal Party of Canada—Humber River-Black Creek, Ontario)

Michael Kram
(Conservative Party of Canada—Regina-Waskana, Saskatchewan)

Chris Lewis
(Conservative Party of Canada—Essex, Ontario)

Rachel Bendayan
(Liberal Party of Canada—Outremont, Quebec)
Parliamentary Secretary to the Minister of Small Business, Export Promotion and International Trade

Terry Sheehan
(Liberal Party of Canada—Sault Ste. Marie, Ontario)
Parliamentary Secretary to the Minister of Economic Development

B. Summary of outcomes

1. Summary of revised CUSMA outcomes

On December 10, 2019, Canada, the United States and Mexico agreed to update certain elements of the new North America Free Trade Agreement (NAFTA) to improve the final outcome and clear the path toward ratification and implementation of the Canada-United States-Mexico Agreement (CUSMA) in all three countries. Changes were made in the areas of state-to-state dispute settlement, labour, environment, intellectual property and rules of origin. The implementation of the new NAFTA will reinforce the strong economic ties between the three countries and enhance North American competitiveness globally. Importantly, the new Agreement preserves and enhances the integrated and virtually tariff-free market in North America by reducing red tape and lessening the administrative burden on importers and exporters.

State-to-state dispute settlement

The state-to-state dispute settlement chapter has been changed in a manner that strengthens enforcement, including in the areas of labour and the environment. Specifically, the Free Trade Commission (of Ministers) will no longer be involved in the dispute settlement process, meaning that a panel will be automatically established upon request. Changes have also been made to ensure that a roster of potential panelists is created and to provide for additional clarity and transparency in the rules of procedure that provide guidance on the operation of panel hearings. Overall, this outcome provides important assurance for Canadians that the Agreement’s operation will be supported by an efficient and effective state-to-state dispute resolution mechanism.

Facility-specific rapid-response labour mechanism

Canada has established a new bilateral mechanism with Mexico under the dispute settlement chapter with respect to specific labour obligations on freedom of association and collective bargaining. This facility-specific rapid-response mechanism will provide Canada with an enhanced process to ensure the effective implementation of specific labour obligations in covered facilities. If a signatory has concerns as it relates to freedom of association and collective bargaining, it can request an investigation by an independent panel of labour experts and, subject to a positive finding, it can take measures to impose penalties on exports from those facilitates. The United States has also established an equivalent mechanism with Mexico. The Canada-Mexico bilateral mechanism will complement Canada’s ongoing efforts to support the implementation of Mexico’s historic labour reforms. The Government of Canada is committed to its long-standing partnership with Mexico and is considering how to support the effective implementation of the Agreement in Mexico.

Labour chapter

The labour chapter has been further strengthened so that the Parties have increased flexibility to pursue violations of the Agreement under the dispute settlement mechanism. This is made possible through the removal of the requirement that violations be committed “through a sustained and recurring course of action or inaction” when it relates to violence against workers. Additionally, the burden of proof has been reversed, in that failure to comply with an obligation in the chapter is now presumed to be “in a manner affecting trade or investment between the parties,” unless the defending party can demonstrate otherwise.

Environment chapter

The changes in the environment chapter will strengthen environmental obligations under the Agreement. Similar to the labour chapter, the burden of proof has been reversed in that failure to comply with an obligation in the chapter is now presumed to be “in a manner affecting trade or investment between the Parties,” unless the defending party can demonstrate otherwise.

A new article has been added to recognize the three Parties’ existing commitments to implement certain multilateral environmental agreements (MEAs) to which they are a party. Specifically, Parties commit to implementing their respective obligations under those MEAs that they have ratified domestically. For Canada, this means that Canada is required to implement its obligations under the following MEAs, including any relevant reservations, exceptions and amendments:

• The Convention on International Trade in Endangered Species of Wild Fauna and Flora;
• The Montreal Protocol on Substances that Deplete the Ozone Layer;
• The Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships;
• The Convention on Wetlands of International Importance Especially as Waterfowl Habitat; and,
• The Convention for the Establishment of an Inter-American Tropical Tuna Commission.

Canada would not be required to sign or ratify, and would not have any new obligations related to, the other two MEAs to which it is not a party, specifically the Convention on the Conservation of Antarctic Marine Living Resources and the International Convention for the Regulation of Whaling.

Intellectual property chapter

The changes in the intellectual property (IP) chapter will affect certain patent and pharmaceutical provisions. Importantly, the Parties have agreed to remove the obligation on data protection for biologics, meaning that Canada will no longer need to amend its domestic regime to provide 10 years of data protection in this area. Additionally, Parties have agreed to:

• remove a provision on the availability of patents for new uses, new methods or new processes of using a known product, as well as a provision on data protection for “new indications” of existing drugs, and
• include additional language on an exception related to regulatory reviews, and new language on how Parties may meet obligations dealing with patent-term restoration, patent linkage and data protection for small molecule drugs.

These amendments clarify that all three Parties maintain flexibility under the new NAFTA to pursue domestic policy priorities in these areas. Notably, Canada will not be required to make changes to its domestic patent or pharmaceutical IP regimes in order to implement the amended provisions.

Rules of origin

Rules of origin are the criteria used to determine whether a good has undergone sufficient production in a free trade area to be eligible for preferential tariff treatment, ensuring that the benefits of an agreement accrue primarily to producers located in the member countries. The automotive rules of origin in the new NAFTA contain a requirement that 70% of the steel purchased by vehicle assemblers has to originate in North America for the vehicle to be eligible for duty free treatment under the new NAFTA. This requirement has been changed to clarify that all steel manufacturing processes must occur in one or more of the Parties, except for metallurgical processes involving the refinement of steel additives, for purposes of meeting the 70% requirement. This provision will come into effect 7 years after the entry into force of the new Agreement. During the first 7 years, the applicable product-specific rules of origin included in the new NAFTA will be used to determine if the steel used by automakers is originating. The Parties have also committed to reviewing the rules of origin applicable to the 70% originating aluminium requirement. This review will take place 10 years after the new NAFTA enters into force.

2. Summary of Protocol of Amendment

On November 30, 2018, Canada, the United States, and Mexico signed an Agreement to replace the North American Free Trade Agreement (NAFTA) with the Canada-United States-Mexico Agreement (CUSMA). Subsequently, on December 10, 2019, Canada, the United States and Mexico agreed to update certain elements of the new NAFTA to improve the final outcome and clear the path toward ratification and implementation of the Agreement in all three countries. This new Agreement will reinforce the strong economic ties between the three countries and support well-paying middle-class jobs for Canadians.

The new NAFTA will maintain the tariff-free market access from the original NAFTA, and includes updates and new chapters to address modern-day trade challenges and opportunities. Since negotiations began in August 2017, Canada engaged constructively and pragmatically with our NAFTA partners to achieve a good deal for Canadians.

The Agreement provides key outcomes for Canadian businesses, workers and communities in areas such as labour, environment, automotive trade, dispute resolution, culture, energy, and agriculture and agri-food. Importantly, the new NAFTA also includes language on gender and Indigenous peoples’ rights.

Facilitating trade in goods

NAFTA eliminated virtually all tariffs between Canada, the U.S. and Mexico, with very few exceptions. The new Agreement maintains these benefits and ensures that the vast majority of North American trade will continue to be duty-free. Additionally, a new chapter on customs administration and trade facilitation standardizes and modernizes customs procedures throughout North America to facilitate the free-flow of goods. There are also important improvements to disciplines on technical barriers to trade that will make it easier for Canadian businesses to export goods within North America.

As a result of this Agreement, Canada agreed to have de minimis thresholds for express courier import shipments of C$150 for duties and C$40 for taxes at the point or time of importation.

Agriculture

The new NAFTA will preserve existing agriculture commitments between Canada, the U.S. and Mexico, and help bring together an already highly integrated North American industry. Canada secured a number of beneficial outcomes for agriculture including:

• New market access in the form of tariff rate quotas for refined sugar and sugar-containing products, as well as certain dairy products;
• A modernized Committee on Agriculture Trade, which will provide a forum for Parties to address issues and trade barriers; and,
• Obligations for agricultural biotechnology that will increase innovation, transparency and predictability.

The Government defended the supply management system from strong U.S. attempts to see it dismantled. As part of the overall balance of the Agreement, Canada will:

• Provide new market access for the U.S. in the form of tariff rate quotas for dairy, poultry and egg products;
• Eliminate current milk classes 6 and 7, and calculate component prices for skim milk powder, milk protein concentrates and infant formula based on a U.S. reference price; and
• Establish a mechanism to monitor exports of skim milk powder, milk protein concentrates and infant formula. These products will be subject to surcharges if exports exceed an agreed threshold.

Autos

The revised automotive rules of origin require higher levels of North American content in order to incentivize production and sourcing in North America. The final outcome builds on the ideas that Canada put forward in early 2018 related to strengthening the North American production platform, reducing red tape and increasing the use of North American parts, steel and aluminum.

More robust rules of origin for the auto sector will help keep the benefits of the Agreement in North America and diminish incentives to make investment and sourcing decisions based on the availability of low-cost labour. Specifically, the new Agreement includes:

• An increase in the regional value content¹ threshold for cars from 62.5% to 75%;
• Stronger regional value content requirements for core car parts, such as engines and transmissions;
• 70% North American steel and aluminum requirements; and
• A new labour value content provision requiring that 40% of value of a passenger car (45% for a light truck) be made up of materials, parts and labour (including final assembly) produced or carried out by workers in a plant where the average hourly wage is at least US$16.

The new Agreement has the potential to generate increased automotive production in North America, including in Canada, as well as additional sourcing opportunities for Canadian parts producers. The Canadian advantage in the automotive sector has always been the strength of our highly skilled workforce, and our workers’ ability to produce high quality and reliable cars and trucks.

U.S. national security measures (Section 232 of the U.S. Trade Expansion Act of 1962)

The Agreement provides a more secure and stable trade environment for Canadian workers and businesses. This is particularly important in light of the investigation under Section 232 of the U.S. Trade Expansion Act of 1962 to determine whether imports of automobiles and auto parts pose a threat to U.S. national security.

Given the integrated nature of the North American auto sector, any national security measures imposed against Canada would have threatened Canadian automobile and parts producers, and Canadians working in the sector. Canada secured an exemption from potential Section 232 measures in a side letter to the Agreement.

In the event that U.S. national security measures are imposed, the side letter guarantees an exemption from Section 232 measures for 2.6 million Canadian automobiles annually. Light trucks do not count towards this amount and are fully exempt from U.S. Section 232 measures. The side letter also guarantees an exemption from Section 232 measures for US$32.4 billion worth of Canadian auto parts annually. These levels are significantly higher than Canada’s exports of automobiles and parts to the U.S. In securing the exemption for Canada, Canadian auto assemblers and parts producers can continue to sell into the U.S. market and will have opportunities to expand their operations beyond current levels of exports.

Canada also secured a commitment from the U.S. to provide a minimum 60-day exemption from any future Section 232 measures. This would allow time for Canada and the U.S. to agree on an appropriate outcome based on industry needs and historical trading patterns.

Dispute settlement

When it comes to disagreements, the new NAFTA builds on and improves the original NAFTA outcome by:

• preserving the use of binational panels to resolve disputes on anti-dumping and countervailing duty matters, which is critically important to preserving market access outcomes and defending Canada’s interests in trade remedy cases; and
• improving the state-to-state dispute settlement process of NAFTA to ensure that arbitral panels are formed to hear disputes and that the process is carried out in a transparent and expedient manner.

Labour

The new NAFTA includes a comprehensive chapter on labour, which is subject to dispute settlement. This chapter aims to level the playing field on labour standards and working conditions in North America by ensuring Parties do not lower their levels of protection to attract trade or investment. The Agreement also contains commitments to ensure national laws and policies provide protection for fundamental principles and rights at work. These include the right to freedom of association and collective bargaining, a prohibition on importing goods made from forced labour and binding obligations on the rights of migrant workers. The chapter also includes an enforceable obligation to address violence against workers, including single instances of violence, or threats thereof.

To address labour violations related to collective bargaining and freedom of association in a timely manner, the Agreement also includes innovative mechanisms for rapid response between Canada and Mexico and between the United States and Mexico. These enforcement mechanisms allow for the rapid deployment of a three-member panel of labour experts to a facility to ensure that national labour law is being respected.

Environment

The Agreement includes a comprehensive environment chapter which is subject to dispute settlement and aims to level the playing field by ensuring Parties do not lower their levels of environmental protection to attract trade or investment. It also introduces new commitments to address global environmental challenges, such as illegal wildlife trade, illegal fishing and depletion of fish stocks, species at risk, conservation of biological diversity, ozone-depleting substances and marine pollution. It includes a new article that identifies 7 multilateral environmental agreements (MEAs) and commits the three Parties to implementing their respective obligations under those MEAs to which they are party.

For the first time in an environment chapter, the new NAFTA includes innovative environmental commitments to improve air quality and combat marine litter. The Parties recognize the importance of these issues and commit to working together to address them.

The parallel Environmental Cooperation Agreement, which complements the environment chapter, ensures that the unique institutions established under the North American Agreement on Environmental Cooperation will continue the legacy of effective trilateral cooperation to protect and enhance the North American environment in the context of increasing economic, trade and social links.

Culture

Canadians have a strong national identity based on our diversity and strength in our differences. Indigenous peoples, Francophone communities and Canadians of every faith, background and culture shape the Canada we call home. As countries become more economically integrated, it is increasingly important that nations are able to preserve a strong sense of national identity and belonging.

The modernized Agreement preserves Canada’s cultural exception, which gives Canada flexibility to adopt and maintain programs and policies that support the creation, distribution and development of Canadian artistic expression or content, including in the digital environment.

This was a key element in NAFTA. It helps protect Canada’s unique identity and provides greater security for the over 660,000² Canadians who work in industries such as publications, broadcasting, and the distribution or sale of books, magazines, film, video and music.

Indigenous peoples

Throughout the negotiations, one of Canada’s objectives for the new NAFTA was to better reflect the interests of Indigenous peoples. To this end, Canada was able to secure important clarity in the form of a general exception related to the rights of Indigenous peoples. Canada also retained policy flexibility for Indigenous peoples and Indigenous-owned businesses, including in the areas of services, investment, government procurement, environment and state-owned enterprises. Additionally, outcomes on environment reflect the important role of Indigenous peoples, including in the conservation of biodiversity.

Trade and gender

Canada has made gender equality and women’s economic empowerment a key priority in its recent trade negotiations. Canada is further demonstrating its leadership on the issue by integrating gender-related provisions in the new NAFTA. This includes new labour provisions which require Parties to implement policies that protect against employment discrimination based on gender. Gender is also addressed in other chapters, including provisions related to corporate social responsibility, and small and medium-sized enterprises.

Energy

Provisions governing trade in energy can be found across the modernized Agreement. This includes disciplines and provisions in the areas of national treatment and market access, rules of origin, customs and trade facilitation, and cross-border trade in services and investment.

Importantly, the Agreement no longer includes what was referred to as the energy “proportionality clause” – which had placed certain limitations on the ability of Parties to constrain the export of energy products. The lack of a proportionality clause in the new Agreement is a reflection of the overall high level of energy security present in the North American market today.

Government procurement

Canada and the U.S. will retain access to each other’s procurement markets, including at the sub-federal level, through their obligations under the World Trade Organization’s Agreement on Government Procurement (GPA). The government procurement obligations between Mexico and Canada will be provided under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Intellectual property

Parties agreed to an updated, comprehensive chapter on intellectual property (IP), with obligations on copyright and related rights, trademarks, geographical indications, industrial designs, patents, data protection for pharmaceutical and agricultural chemical products, trade secrets and IP rights enforcement.

• The modernized Agreement will require changes to Canada’s current IP legal and policy framework in certain areas, such as requiring Parties to provide a general term of copyright protection of “life plus 70 years” for works of authorship (Canada currently has a term of “life plus 50 years”)
• The Agreement also requires Parties to provide patent term adjustment to compensate patent applicants for “unreasonable” delays in the processing of patent applications. 

Canada has transition periods of 2.5 years and 4.5 years, respectively, following the entry into force of the Agreement to implement these obligations.

The new Agreement includes provisions on Internet service provider liability to address online infringement, which enable Canada to maintain its current “notice-and-notice” regime.

Under the December 2019 Protocol amending the new NAFTA, Parties agreed to amend or delete certain provisions dealing with patents and pharmaceutical IP. Notably, Parties agreed to remove the obligation to provide 10 years of data protection for biologics, meaning that new NAFTA will not require Canada to make changes to its domestic regime in this area.

Review process & ongoing modernization

The new NAFTA includes a requirement for a formal review of the Agreement at least every six years after entry into force. This new review process will help ensure the Agreement remains relevant, effective and beneficial for North American workers. It will also help address issues before they become major challenges, and provide predictability and stability for Canadian consumers and businesses. While establishing that the Agreement will terminate 16 years after entry into force, the Parties can agree to extend the Agreement for a further 16 years after each regular review.

3. Summary of Side Letters

Section 232 - Autos and Auto Parts (Canada-U.S.)

• Includes commitments that provide Canada with a partial volume exemption from any tariffs the U.S. may impose on the import of automobiles or auto parts pursuant to Section 232 of the Trade Expansion Act.
• Specifically commits the U.S. to exempt the following goods from Canada from such measures:
  • 2.6 million passenger vehicles annually;
  • all light trucks (i.e., pickup trucks); and,
  • US$32.4 billion in declared customs value of auto parts annually.
• Subject to the dispute settlement procedures contained in NAFTA or CUSMA, whichever is in effect at the time a dispute arises.

Section 232 – Process (60 day exemption) (Canada-U.S.)

• Applies to any future Section 232 tariffs applied by the U.S. and ensures that, if such tariffs are put in place, Canada:
  • will be exempted from them for 60 days (allowing for potential negotiation);
  • is entitled to retaliate without needing to proceed to dispute settlement; and,
  • retains its right to challenge that application at the WTO.

Energy Regulatory Measures and Regulatory Transparency (Canada-U.S.)

• Includes bilateral commitments subject to dispute settlement on energy regulatory measures and regulatory transparency, including to:
  • encourage cooperation in the energy sector;
  • establish or maintain an independent regulatory authority, and the establishment of transparency requirements for the authorization process in the energy sector;
  • provide a right of appeal or review for certain decisions concerning these authorizations; and,
  • ensure that measures governing access to or use of energy infrastructure are neither unduly discriminatory nor unduly preferential.
• Includes a longstanding U.S. commitment (contained in the CUSFTA and the NAFTA) ensuring that the Bonneville Power Administration, a U.S. federal agency, affords B.C. Hydro treatment that is no less favourable than that afforded to utilities located outside of the Pacific northwest.
• The CUSMA does not include the provision known as the “energy proportionality clause.” Under NAFTA’s “energy proportionality clause”, if either the U.S. or Canada imposed an export restriction on an energy good, it had to ensure that customers in the other country had the opportunity to bid on a proportion of the total available supply of the particular good that was equivalent to their share of recent exports from the country introducing the restriction. This clause was never invoked but created some concerns regarding energy sovereignty. 

Guidelines for Research and Development Expenditures, 2004 (Canada-U.S.)

• Intended to provide assurances that, notwithstanding that a NAFTA chapter eleven Tribunal found the Newfoundland and Labrador Guidelines for Research and Development Expenditures (2004) to be inconsistent with the performance requirements provision of the NAFTA investment chapter with respect to the Hibernia and Terra Nova projects, not listing this measure as a non-conforming measure will not serve as an impediment to the U.S. certification process under the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (i.e. Trade Promotion Authority).

Natural Water Resources (Canada-U.S.)

• Based on the 1993 Canada-U.S.-Mexico Declaration on Water Resources and the NAFTA.
• Confirms that the CUSMA does not create a right to the water resources of a Party to the Agreement and that the CUSMA does not include any obligations that allows for the exploitation of another Party’s natural water resources for commercial use, including export of water in bulk.

B.C. Wine (Canada-U.S.)

• Confirms an understanding that the Government of British Columbia will modify the measures at issue in the U.S. request for a WTO dispute settlement panel by November 1, 2019, after which Canada and the U.S. will notify a mutually-agreed solution to the WTO.
• Confirms that, until November 1, 2019, the U.S. will take no further action at the WTO in relation to the relevant B.C. measures.

4. Summary of the Environmental Cooperation Agreement (ECA)

The parallel Environmental Cooperation Agreement (ECA), which complements the CUSMA environment chapter, ensures that the unique institutions that have existed for over 24 years under the North American Agreement on Environmental Cooperation are modernized, including the Commission for Environmental Cooperation (CEC) and its Montreal-based Secretariat.

In particular, under the ECA the Parties agreed to develop cooperative activities on a broad range of areas related to:

• strengthening environmental governance;
• reducing pollution and supporting strong, low emissions, resilient economies;
• conserving and protecting biodiversity and habitats;
• supporting green growth and sustainable development; and,
• promoting the sustainable management and use of natural resources.

The ECA ensures that the CEC Secretariat will administer the submissions on enforcement matters process that has been incorporated and strengthened in the environment chapter. This process facilitates public submissions on environmental matters.

The ECA encourages public participation that is inclusive and diverse, as well as improved outreach and public participation, including with Indigenous peoples, in the development, implementation, and monitoring of cooperative activities. The ECA has also retained the Joint Public Advisory Committee, which serves as the core mechanism for public participation and stakeholder engagement in the work of the CEC.

C. Issue briefs

5. Agriculture and Agri-Food

Top line messages

• The Agreement preserves the existing NAFTA agriculture commitments between Canada, the U.S., and Mexico. Under NAFTA, North American trade in agriculture rose to nearly US$100 Billion.
• The Agreement includes a number of positive outcomes for Canada's export-oriented agriculture and agri-food sector, including maintaining existing duty-free access, as well as providing new market access for Canadian exports of refined sugar, sugar-containing products and certain dairy products including cheese, cream and butter.
• The CUSMA includes new obligations for agricultural biotechnology, including provisions that recognize and support the fundamental principles that encourage innovation and facilitate trade in products of agricultural biotechnology.

Supplementary messages

• The Agreement allows U.S. grown wheat of varieties registered in Canada to receive an official Canadian grain grade, and to no longer require country of origin statements on quality certificates.
• The CUSMA also has a consultation mechanism for Parties to address domestic support that may be trade distorting, and a modernized Committee on Agricultural Trade which will provide a forum for Parties to address trade issues and barriers.

Supporting facts and figures

• Under the CUSMA, Canada has maintained all existing tariff-free access to the U.S. and Mexican markets under CUSFTA and NAFTA.
  • For example within agriculture, existing tariff-free access will continue for Canadian canola products, with exports to the U.S. valued at $3.6 billion and exports to Mexico valued at $782.1 million in 2018, among other agricultural products.
• Canada and the U.S. benefit from highly integrated supply chains with bilateral agriculture trade totalling $63.8 billion in 2018. 
• In addition, both countries work collaboratively on issues of mutual interest such as regulatory cooperation, science and technology cooperation, third country market access, and promotion of science-based international standards.
• Canada and Mexico enjoy a productive bilateral agricultural trade relationship and have highly integrated markets.
• Total trade in agriculture products between Canada and Mexico was worth $4.6 billion in 2018.
• Canada was Mexico’s fourth-largest export market for agriculture products in 2018 and Mexico was Canada’s fourth-largest export market.
• Overall, bilateral agricultural trade between Mexico and Canada continues to see significant growth, with an annual growth rate of 7.0% over the last five years.

Background

• The CUSMA includes a number of positive outcomes for Canada’s agriculture and agri-food sector, including (1) preservation of existing market access; (2) incremental market access, including for refined sugar and margarine; (3) improved rules of origin for margarine; (4) new obligations affecting agricultural biotechnology; (5) a new sanitary and phytosanitary measure chapter; and (6) a modernized Committee on Agricultural Trade.
• Canada also agreed to allow United States grown wheat varieties registered in Canada to receive an official Canadian grain grade and to not require country of origin statements on quality certificates.

6. Supply management (including transitional support)

Top line messages

• The CUSMA preserves and maintains the three pillars of the supply management system: production controls, import controls, and price controls. The future of supply management is not in question.
• As part of the negotiated outcome, Canada agreed to provide incremental market access for dairy, poultry and egg products.
• Canada's dairy, poultry and egg farmers, their families and their communities can count on the full support of our Government.
• The Government will continue to work in partnership with all sectors under supply management to address future impacts resulting from the Canada-United States-Mexico Agreement.

Supplementary messages

• The Government understands how much hard work goes into building and growing dairy, poultry and egg businesses, and we are committed to working with the sectors to help mitigate the impacts of recent trade deals.
• In fall 2018, the Government of Canada announced the formation of three working groups - with dairy, poultry and egg farmers and processors.
• These groups were tasked with looking at providing support and helping the industries adjust to recent trade agreements. The overall goal is to ensure Canada maintains its robust dairy, poultry and egg industries – now and in the future.
• The Government will continue to work in partnership with poultry and egg producers and processors to address the impacts of CPTPP and CETA, and once ratified, will work with the supply-managed sectors to address potential future impacts resulting from the Canada-United States-Mexico Agreement.

Responsive – Milk class 7 and new pricing obligations

• As part of the negotiated outcome in CUSMA, Canada agreed to eliminate the existing milk class 7.
• Certain products previously classified in milk class 7 (skim milk powder, milk protein concentrates and infant formula) will be priced using a U.S. reference price, while other products will be reclassified based on their end-use.
• The provincial milk marketing boards will continue to be able to set milk classes and their associated prices.

Responsive – Export thresholds

• As part of the negotiated outcome in CUSMA, Canada agreed to monitor exports of certain dairy products (skim milk powder, milk protein concentrates and infant formula).
• If global exports of these products exceed certain thresholds, Canada will impose charges to exports above the thresholds.
• For skim milk powder and milk protein concentrates, the export threshold will start at 55,000 tonnes in the first year and be reduced to 35,000 tonnes in the second year of the Agreement with an annual growth rate of 1.2% thereafter. The charge on exports above the threshold will be C$0.54 per kilogram.
• For infant formula made from cow’s milk, the export threshold will start at 13,333 tonnes in the first year and increase to 40,000 tonnes in the second year of the Agreement with an annual growth rate of 1.2% thereafter. The charge on exports above the threshold will be C$4.25 per kilogram.
• To implement the export charge on skim milk powder, milk protein concentrates, and infant formula, the Export and Import Permits Act (EIPA) and the Export Control List will be amended.
• No decisions have been taken regarding the administration of these commitments.

Supporting facts and figures

• Canada has agreed to grant additional market access to the U.S for specific quantities (expressed in metric tonnes) of dairy products.
  • This access will be phased in over six years. After year six, a growth factor of 1% will be compounded for an additional 13 years.
• Total market access to foreign competitors for dairy under all trade commitments, including the CUSMA, is estimated at approximately 10% of Canada's production.
• Canada negotiated reciprocal access to the U.S. dairy market, including tonne-for-tonne access for most dairy products.
• The Agreement includes changes regarding how milk is marketed in Canada, including the elimination of milk classes 6 and 7 within six months following the entry into force of the Agreement. 
• To mitigate the impact of these changes, the Government has committed to fully support producers and processors.

Background

The Government maintained the three pillars of Canada's supply management system for dairy, poultry and eggs — production control, pricing mechanisms, and import control — despite strong U.S. attempts to dismantle them. As part of the negotiated outcome, Canada agreed, among other things, to provide additional market access to the United States for dairy, poultry, and egg products; to ensure the elimination of current milk price classes 6 and 7; to establish a new pricing formula and export charge for skim milk powder, milk protein concentrates, and infant formula if exports exceed certain thresholds; and to publish, notify and consult on various aspects of milk class pricing.

The Government has committed to supporting farmers and processors in the supply management sectors as they adjust to the loss of market share. Following the signing of the CUSMA in the fall of 2018, the Government created working groups comprised of representatives from supply-managed industries. There were three working groups, two with dairy farmers and processors and one with poultry and egg farmers and processors. The Dairy Mitigation Working Group and the Poultry and Egg Working Group have concluded their work and their recommendations have been shared with the Minister of Agriculture and Agri-Food. The Dairy Strategic Working Group work remains ongoing.

In Budget 2019, the Government of Canada demonstrated its commitment to support farmers in the supply-managed sectors following ratifications of recent trade agreements. The Government will continue to work in partnership with supply management stakeholders to address the possible future impacts of the CUSMA.

7. Section 232 - Exemption on autos

Top line messages

• Canada secured a partial exemption from any potential U.S. Section 232 tariffs on automobiles and auto parts in a side letter, which took effect November 30, 2018.
• The side letter guarantees an exemption from any such tariffs for up to 2.6 million Canadian automobiles and US$32.4 billion worth of Canadian auto parts imported into the U.S. annually. Light trucks are fully exempt.
• These levels are significantly higher than Canada’s current exports of autos and auto parts to the U.S., meaning that, even if the U.S. were to impose Section 232 tariffs, there is room for growth in Canadian exports to the U.S.

Supplementary messages

• Separately, Canada secured a forward-looking process letter on future Section 232 measures on any goods, which includes a commitment from the U.S. to provide at least a 60-day exemption to Canada from any future measures under Section 232, including for automobiles and auto parts.
• Canada’s agreement to the Section 232 side letters should not be interpreted as condoning such measures by the United States.
• In the side letter, Canada retained its right to challenge U.S. Section 232 measures at the WTO, including on automobiles and auto parts.

Supporting facts and figures

• The side-letter entered into force on November 30, 2018.
• The annual exemption applies to 2.6 million automobiles and US$32.4 billion worth of auto parts, which exceed current exports to the U.S., thereby allowing for significant growth in Canadian exports if such tariffs are put in place.
• Light trucks (e.g., pickup trucks) are fully exempt from any Section 232 measures.

Background

On May 23, 2018, the U.S. initiated an investigation under Section 232 of the U.S. Trade Expansion Act of 1962 to determine if imports of automobiles and auto parts posed a threat to U.S. national security. On May 17, 2019, based on a report by the U.S. Department of Commerce (Commerce), President Trump issued a Proclamation declaring that the imports of autos and auto parts constitute a national security threat. The Proclamation delayed any possible actions under Section 232 for an additional 180 days (i.e., November 13, 2019) to allow the U.S. Trade Representative to negotiate agreements with the EU and Japan. This yielded the U.S.-Japan Trade Agreement, which entered into force on January 1, 2020. Discussions with the EU are ongoing. The Proclamation further implied that CUSMA implementation could “help to address the threatened impairment of national security” and thereby could result in Canada’s full exemption from any Section 232 measures on autos and auto parts.

Canada has strongly rejected the notion that Canadian automobiles and auto parts could pose a national security threat to the United States, including in Canada’s official submission to the U.S. Department of Commerce.

8. Automotive rules of origin

Top line messages

• Strengthened rules of origin for vehicles and automotive parts will create new opportunities for Canadian parts producers and further stimulate production in the North American region.
• CUSMA automotive rules of origin will provide a stable and predictable trade environment for the Canadian auto industry.
• Canadian industry stakeholders were instrumental in guiding Canada’s positions throughout the modernization process, and they have indicated broad support for the new regime.

Supplementary messages

• Ideas promoted by Canada that focused on consolidating the North American automotive production platform fostered positive and constructive engagement in the NAFTA discussions, contributing to the final outcome.
• The new rules of origin support Canadian companies in the sector and the Canadians they employ.

Supporting facts and figures

• The automotive sector plays a key role in Canada’s economy. Canada’s total imports and exports in automotive goods globally averaged $176 billion a year (2016-18).
• Canada is one of the world’s top 10 producers of light vehicles.
• Five global original equipment manufacturers (OEMs) assemble more than 2 million vehicles at their Canadian plants each year: Fiat Chrysler Automobiles (FCA), Ford, GM, Honda and Toyota.
• Canada’s five automobile assemblers directly employ approximately 36,000 Canadians.
• Canada is also home to a vibrant auto parts sector, led by a number of innovative, global, Tier 1 suppliers.
• The motor vehicle manufacturing industry directly employs nearly 137,000 Canadians³. Almost 420,000 people are also indirectly employed in sales and aftermarket services.
• Canada is the top export market for vehicles made in the U.S., and the United States is Canada’s leading export market. Over 90% of Canada’s vehicle exports are sent to the United States.

Background

Rules of origin are the criteria used to determine whether a good has undergone sufficient production in the free trade agreement region to be eligible for preferential tariff treatment. The CUSMA rules ensure that the benefits of the Agreement accrue primarily to producers located in CUSMA countries.

The new automotive rules of origin include elements that will require increased levels of North American content in order to incentivize production and sourcing in North America. The CUSMA outcome on automotive rules of origin includes:

• a 75% regional value content requirement (from 62.5% in NAFTA);
• a new 75% regional value content requirement for core parts such as engines and transmissions;
• a new 70% North American steel and aluminum requirement; and
• a new labour value content requirement.

The new labour value content requirement requires that a significant percentage of the value of a vehicle (40% for cars and 45% for light trucks) be produced by workers in a plant where the average hourly wage is at least US$16. This provision has the potential to improve Canadian automotive manufacturing’s competitiveness vis-à-vis lower cost jurisdictions. The CUSMA also includes strengthened rules of origin for auto parts.

In December 2019, Canada, the United States and Mexico agreed to update certain elements of the CUSMA. The new changes to the automotive rules of origin further strengthened the steel requirement so that, after seven years, the steel purchased by vehicle producers will have to undergo more manufacturing in North America to meet the 70% North American steel requirement. Furthermore, the steel manufacturing processes must occur in one or more of the Parties, except for metallurgical processes involving the refinement of steel additives. The December update also stipulates that the Parties shall review the 70% aluminium requirement 10 years after entry into force of the Agreement with a view to strengthening it. Moreover, the CUSMA Committee on Rules of Origin is authorized to consider changes to the rules of origin at any point after the Agreement enters into force.

9. Aluminium

Top line messages

• The new CUSMA automotive rules of origin require that 70% or more of the aluminium purchased by an automobile producer qualify as originating in North America for that producer’s vehicles to qualify for duty-free treatment.
• This is a significant improvement for Canada’s aluminum sector, as the NAFTA does not have any requirements relating to the use of North American aluminium in automotive goods.
• The Aluminium Association of Canada has expressed broad support for the outcome and called upon the government to proceed with implementation in a timely manner.

Supplementary messages

• In addition to the aluminium-specific requirement, the CUSMA includes a 75% regional value content requirement for “light vehicles” - i.e. passenger cars and light trucks (pickups), as well as applying a similar 75% regional value requirement to core parts used in the production of automobiles (engines, transmissions, bodies, axles, steering and suspension systems).
• This regional value content requirement will incentivize both automakers and parts producers to use originating, North American aluminium in the production of these core parts.
• The new CUSMA automotive rules of origin support Canadian producers of aluminium and the Canadians they employ.
• As a result of the December 10, 2019, amendments to the Agreement, the Parties have committed to review the 70% requirement for aluminium in the future to determine if this provision needs to be further strengthened.

Background

The CUSMA includes a robust suite of requirements that an automaker must fulfil in order to receive duty-free treatment when exporting under the new Agreement. These requirements include two provisions that relate to aluminium:

• 70% of the aluminium purchased by an automaker for use in the production of a vehicle must qualify as originating in North America; and,
• the core parts used in the production of a vehicle must contain 75% regional value content (engine, transmission, body, axle, suspension system, steering system and lithium ion battery).

When the new Agreement enters into force, 70% of the steel and aluminium must originate in North America for the vehicle to be eligible for duty free treatment under the new NAFTA. The current NAFTA does not include any requirements relating to the use of North American aluminium in automotive goods. Despite this, North American automakers are significant consumers of aluminium smelted in Canada, a reflection of Canada’s status as a reliable and competitive supplier of this important material.

Under this new provision, whether the aluminium purchased by an automaker qualifies as originating in North America will be determined on the basis of the CUSMA product-specific rules of origin (PSROs). This is a strong provision; it means that any aluminium purchased by an automaker must be produced in Canada, the United States or Mexico in order to count toward the 70% requirement. Aluminium that is imported from China, Russia or anywhere else outside of North America is treated as non-originating and, if purchased by an automaker, will not count toward the 70% requirement. 

Many automakers produce aluminium parts and this 70% requirement also applies to these parts (but does not apply to parts produced by parts companies or to direct purchases of aluminium by automotive parts producers). Any non-North American produced aluminium purchased by automakers to produce parts will not count toward the 70% requirement – even if the part is being cast or stamped by the automaker in North America. 

The 70% originating requirement comes into immediate effect when the Agreement enters into force. Automakers that are dependent on imported, non-North American produced aluminium will need to change their suppliers or face tariffs when their vehicles are traded within the region. 

In addition to the aluminium-specific requirement, the CUSMA includes a regional value content requirement for core parts (engines, transmissions, bodies, axles, steering and suspension systems), which is being increased from the NAFTA RVC threshold of 60% or 62.5%, to 75%.

The goal of the core parts requirement is to incentivize the use of North American aluminium by automakers within the region. In doing so, the provision will support Canada’s aluminium industry particularly given the increasing trend toward greater use of aluminium to make vehicles lighter and more fuel efficient.

On December 10, 2019, amendments were made to the CUSMA rules of origin for automotive goods under which the 70% requirement applicable to steel will be strengthened 7 years after the Agreement enters into force, such that steel will need to be melted and poured within North America in order to qualify toward the 70% steel requirement. The Parties agreed to review the aluminium requirement 10 years after the Agreement enters into force. 

The Aluminium Association of Canada has expressed broad support for the outcome and called upon the government to proceed with implementation of CUSMA in a timely manner.

10. Labour

Top line messages

• The Agreement includes a comprehensive labour chapter that is subject to dispute settlement.
• This chapter aims to level the playing field on labour standards and working conditions in North America, and contains commitments to ensure national laws and policies provide protection for fundamental principles and rights at work.
• The amendments to CUSMA will further strengthen labour obligations, provide Canada with an enhanced process to ensure the effective implementation of specific labour obligations, which will help level the playing field.

Supplementary messages

• The CUSMA commits Parties to high labour standards and prevents them from waiving or derogating from their domestic labour laws in order to encourage trade or investment.
• Includes key provisions that support the advancement of fair and inclusive trade, including those that address violence against workers, protection for migrant workers and the prohibition of goods produced by forced labour.
• Mexico has undertaken specific commitments to provide for the protection and effective recognition of the right to collective bargaining.
• As part of the December 2019 Protocol of Amendment, the labour chapter was further strengthened so that the Parties have increased flexibility to pursue violations of the Agreement under the dispute settlement mechanism.
• These changes will make it easier to pursue violations of the Agreement’s labour obligations, in particular as it relates to violence or threats of violence against workers.
• Canada also established a new bilateral rapid response mechanism with Mexico under the dispute settlement chapter, which will contribute to the effective implementation of labour obligations on freedom of association and collective bargaining obligations in covered facilities.

Responsive – if asked about Mexico’s labour reforms

• Canada was pleased to see Mexico’s labour reform enter into force on May 1, 2019.
• Canada is committed to supporting Mexico’s labour reform efforts, which will help level the playing field, create the best possible conditions for growth, and support better jobs for Canadian workers.

Responsive – If asked for further information on the bilateral mechanism on labour

• The new bilateral mechanism with Mexico will provide Canada with an enhanced process to ensure the effective implementation of specific labour obligations in covered facilities.
• If Canada has concerns as it relates to freedom of association and collective bargaining, it can request an investigation by an independent panel of three labour experts and, subject to a positive finding, it can take measures to impose penalties on exports from those facilities.
• The United States has also established an equivalent mechanism with Mexico.
• The Canada-Mexico bilateral mechanism will complement Canada’s ongoing efforts to support the implementation of Mexico’s historic labour reforms.
• The Government of Canada is committed to its long-standing partnership with Mexico and is considering how to support the effective implementation of the agreement in Mexico and improved labour standards across North America.

Responsive - Why are Canada and Mexico forming a labour working group?

• The Canada-Mexico Labour Working Group on CUSMA builds on the longstanding relationship between the two countries.
• The working group aims to establish a proactive dialogue on labour reform, discuss and undertake joint collaborative projects to provide technical expertise and share best practices, monitor progress, and strengthen cooperation on labour.
• Canadian and Mexican labour officials have held two technical meeting as part of the Working Group in September 2019 and January 2020 in Mexico City. These meetings have allowed officials from both countries to discuss Mexico’s progress on the implementation of the labour reform and potential areas for future cooperation.

Supporting facts and figures

• The CUSMA is the first Canadian trade agreement that includes an obligation for the Parties to prohibit the importation of goods produced by forced labour. Canadian officials are developing an approach to implement the obligation in a manner that is consistent with Canada’s international trade obligations.
• The chapter includes mechanisms to implement and monitor compliance with the obligations, including consultations among the Parties to discuss matters and to jointly decide on any course of action to address the matter. It also requires the establishment of a Contact Point in each Party, through which the public can raise concerns about labour issues addressed in the chapter.

Background

CUSMA includes a comprehensive chapter on labour, which is subject to dispute settlement. This chapter aims to level the playing field on labour standards and working conditions in the CUSMA region by ensuring Parties do not lower their levels of protection to attract trade or investment. CUSMA also contains commitments to ensure national laws and policies provide protection for fundamental principles and rights at work. These include the right to freedom of association and collective bargaining, a prohibition on importing goods made from forced labour and binding obligations on the rights of migrant workers. The chapter also includes an enforceable obligation to address violence against workers, including single instances of violence, or threats thereof.

The chapter also includes an Annex on Worker Representation in Collective Bargaining in Mexico, under which Mexico commits to specific legislative actions to provide for the effective recognition of the right to collective bargaining.

Modifications to the labour outcomes

The amending protocol modifies the labour provisions to provide increased flexibility to pursue violations of the Agreement under the dispute settlement mechanism. This is made possible through the removal of the requirement that violations be committed “through a sustained and recurring course of action or inaction” when it relates to violence against workers. Additionally, the burden of proof has been reversed in that failure to comply with an obligation in the chapter is now presumed to be “in a manner affecting trade or investment between the Parties”, unless the defending Party can demonstrate otherwise.

Importantly, Canada established a new bilateral mechanism with Mexico under the dispute settlement chapter, with respect to specific labour obligations on freedom of association and collective bargaining. This facility-specific rapid-response mechanism will provide Canada with an enhanced process to ensure the effective implementation of specific labour obligations in facilities covered by the agreement. If a Party has concerns as it relates to freedom of association and collective bargaining, it can request an investigation by an independent panel of labour experts and, subject to a positive finding, it can take measures to impose penalties on exports from those facilitates. The U.S. has also established an equivalent mechanism with Mexico. The Canada-Mexico bilateral mechanism will complement Canada’s ongoing efforts to support the implementation of Mexico’s historic labour reforms.

Mexico’s CUSMA-related reforms

Canada is working closely with Mexico to support its CUSMA-related labour reforms. In particular, Canada and Mexico formed a Bilateral Labour Working Group in August 2019 to strengthen bilateral cooperation and identify opportunities for Canadian support and technical expertise. At present, the working group has identified opportunities for cooperation in the areas of unfair labour practices and labour mediation and conciliation. The working group will meet quarterly to review progress and identify new opportunities for cooperation on labour reform.

Upon entry into force of the CUSMA, the North American Agreement on Labour Cooperation will be terminated.

11. Environment

Top line messages

• For Canada, it is essential that trade liberalization and environmental protection be mutually supportive.
• Strong environmental obligations in the CUSMA will help Canadian businesses remain competitive by ensuring our trading partners do not gain an unfair advantage by not enforcing their environmental laws.
• The complementary Environmental Cooperation Agreement will modernize the existing institutions, including the Commission for Environmental Cooperation, and help advance trilateral cooperation on important issues such as climate change.

Supplementary messages

• Promoting stable and transparent environmental regulatory frameworks and institutions in our trade agreements provides Canadians with greater certainty on the environmental governance practices of our preferential trading partners.
• The ambitious environment chapter is fully subject to the dispute settlement mechanism of the Agreement. 
• As part of the December 2019 Protocol of Amendment, the environment chapter was strengthened through a new commitment for Parties to implement their respective obligations under specific multilateral environmental agreements.
• The environment chapter was further strengthened to provide Parties greater flexibility to pursue violations of the Agreement under the dispute settlement mechanism.
• Climate change is a priority for Canada and we will continue to advance trilateral cooperation with our CUSMA partners through the ongoing work of the Commission for Environmental Cooperation.

Supporting facts and figures

• In addition to core obligations for Parties to maintain high levels of environmental protection and robust environmental governance, CUSMA includes commitments to address a range of global environmental challenges, such as illegal wildlife trade, sustainable fisheries and forest management, and biodiversity conservation.
• CUSMA introduces articles on air quality and marine litter, a first for a trade agreement environment chapter.
• It also includes innovative commitments to prevent the use of explosives and poisons in commercial fish harvesting, and a binding commitment to prohibit shark finning—a first for Canada.

Background

NAFTA was the first free trade agreement to link the environment and trade through a historic parallel agreement on environmental cooperation, the North American Agreement on Environmental Cooperation (NAAEC).

The CUSMA outcome strengthens and modernizes environmental provisions by integrating them into an ambitious and comprehensive environment chapter that is subject to dispute settlement. The environment chapter also includes mechanisms to resolve disagreements through consultation and cooperation.

The core obligations require Parties to maintain high levels of environmental protection and robust environmental governance, including commitments to: enforce environmental laws and not derogate from laws to promote trade; promote transparency, accountability and public participation; and ensure environmental impact assessment processes are in place for projects having potential adverse effects on the environment.

The CUSMA also creates new commitments to address a range of global environmental challenges, including substantive obligations to:

• combat illegal wildlife trade, illegal logging, and illegal, unreported and unregulated (IUU) fishing;
• promote sustainable forestry and fisheries management;
• conserve species at risk;
• implement relevant multilateral environmental agreements; and,
• take measures to protect the ozone layer and address marine pollution.

In December 2019, modifications were made to the CUSMA environment chapter. The changes expand on the obligations related to multilateral environmental agreements (MEAs). Parties commit to implement their respective obligations under specific MEAs, including any relevant reservations, exceptions and amendments. For Canada, this includes:

• the Convention on International Trade in Endangered Species of Wild Fauna and Flora;
• the Montreal Protocol on Substances that Deplete the Ozone Layer,
• the Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships;
• the Convention on Wetlands of International Importance Especially as Waterfowl Habitat; and,
• the Convention for the Establishment of an Inter-American Tropical Tuna Commission.

In addition, changes to the Agreement on environment include:

• a new provision to clarify the relationship between CUSMA and multilateral environmental agreements; and
• new language that reverses the burden of proof in that failure to comply with an obligation in the environment chapter is now presumed to be “in a matter affecting trade or investment between the parties,” unless the defending party can demonstrate otherwise.

As a part of the CUSMA outcome, the Parties agreed to the parallel Environmental Cooperation Agreement (ECA). The ECA ensures that the unique institutions that have existed for over 25 years under the NAAEC are modernized, including the Commission for Environmental Cooperation and its Montreal-based Secretariat. The Commission will be modernized to continue the legacy of effective trilateral environmental cooperation between Parties, including on global environmental issues of importance to Canada, such as climate change.

CUSMA does not include a trilateral commitment to address climate change. However, the Parties committed to cooperate in areas such as the promotion of environmental goods and services, sustainable forest management and air quality, each of which play a role in addressing climate change.

12. Intellectual property

Top line messages

• The CUSMA will create new regional minimum standards across all areas of intellectual property (IP) protection and enforcement.
• The comprehensive IP chapter reflects a balance achieved in the negotiation of this Agreement and will provide Canadian innovators and creators with a predictable and transparent framework for the effective protection and enforcement of IP across the North American marketplace.

Supplementary messages

• The IP chapter includes rules in respect of internet service provider liability that recognize Canada’s current “notice-and-notice” regime in this area as an effective approach to addressing online infringement.
• The IP chapter requires parties to cooperate on IP matters, including with respect to SMEs, and IP-related education and awareness.

Responsive – biologic drugs

• The obligation to provide 10 years of data protection for biologic drugs was removed under the December 10, 2019 Protocol of Amendment.
• Canada will therefore not be required to make changes to our domestic regime (Canada currently provides 8 years of data protection for biologic drugs).

Responsive – Changes required under Canada’s IP regime

• Parties will be required to provide a general copyright term of “life of the author” plus 70 years (Canada currently provides a term of “life of the author” plus 50 years domestically).
• Parties will also be required to provide patent term adjustment (PTA) when there are unreasonable patent office delays, which Canada does not currently provide in its domestic IP law and policy.
• Canada has transition periods of 2.5 and 4.5 years, respectively, to implement these obligations following the entry into force of the Agreement. These transition periods will enable us to undertake a thorough analysis of potential effects and consult broadly with Canadians.
• Canada will be required to provide ex officio border enforcement for suspected counterfeit trademark and pirated copyright goods in-transit, as well as new criminal offenses for the unauthorized and wilful misappropriation of trade secrets.

Responsive - Drug costs

• It is possible that the obligation to provide patent term adjustment (PTA) for unreasonable patent office delays could result in the delay of the market entry of available lower-cost generic and biosimilar versions of branded drugs.
• However, it is not clear what costs could result from PTA. If there were unreasonable patent office delays, eligible patents would not receive additional protection until the patent expires, which would not begin until more than 20 years after the signature of the Agreement.
• In addition, any potential impacts would vary from year to year, depending on a range of variables (i.e. the specific drug benefitting from extended protection; how widely-prescribed the drug is; the availability of lower-cost generic or biosimilar versions etc.)

Supporting facts and figures

• In 2017-2018, nearly half (46%) of the Canadian Intellectual Property Office’s (CIPO’s) patent applications, 29% of its trademark applications, and 53% of its industrial design applications originated from the U.S.
• The U.S. is the largest destination for Canadian international IP applications: in 2016, 68% of all international patent applications by Canadian innovators were filed in the U.S.

Background

The CUSMA intellectual property (IP) chapter contains obligations on copyright and related rights, trademarks, geographical indications, industrial designs, patents, pharmaceutical and agricultural chemical product data protection, trade secrets, and civil, criminal, and border enforcement.

On pharmaceuticals, the original Agreement’s obligation to provide a 10 year term of protection for biologic drugs was removed from the Agreement as part of the Protocol of Amendment signed on December 10, 2019.

On patents, the chapter includes an obligation to provide patent term adjustment (PTA) only in respect of unreasonable patent office delays. Canada has a transition period of 4.5 years following the entry into force of the Agreement to implement this obligation. This transition period will enable the Government to consult broadly with Canadians to determine how best to implement the obligation.

PTA would mean that eligible patents would not expire 20 years after their patent filling date, as an additional period of protection would be applied after this time. Any impacts which may arise from a PTA would therefore not be felt for at least 20 years after the signature of the Agreement. The exact impact of any potential delays in the market entry of lower-cost, available generic or biosimilar medicines is difficult to quantify. If there were delays, the calculation of the costs would vary from year to year, and depend on a range of variables, such as the specific drug benefitting from an extended period of patent protection, the availability and relative cost of biosimilar or generic versions of drugs vis-à-vis the patent-protected version, and how widely-prescribed the drug is. Any changes to any of these variables would have an impact on the cost estimate for a given drug.

On other patent and pharmaceutical related obligations, such as patent term restoration (PTR) in respect of marketing approval delays, and data protection for chemical drugs, Canada has scope to meet these obligations by way of its existing regime.

On copyright and related rights, the outcome requires an increase in Canada’s general term of copyright protection by 20 years to “life of the author” plus 70 years for works of authorship (2.5 year transition period), as well as a term of 75 years for performances and phonograms (up from the current 70 years). Parties are also required to provide full national treatment in respect of payments for certain uses of copyrighted works, performances and phonograms.

The IP chapter requires new criminal remedies in respect of rights management information (or “digital watermarks”), comparable to what Canada already provides in respect of technological protection measures (or “digital locks”) on copyrighted works. Canada has also preserved important flexibilities in respect of technological protection measures, as well as on Internet service provider (ISP) liability that enables Canada to retain its existing “notice-and-notice” ISP regime.

On IP rights enforcement, the IP chapter includes civil and criminal remedies in respect of the misappropriation of trade secrets, as well as an obligation to provide authority to border officials to detain suspected counterfeit or pirated goods in transit (e.g. goods transiting through Canada en route to a third country). Canada already provides this authority in respect of suspected counterfeit and pirated goods upon import and export.

13. Digital trade

Top line messages

• The digital economy and rapidly increasing digitalization of international trade has created new opportunities to promote inclusive economic growth and prosperity.
• The new chapter on digital trade provides a framework that will ensure Canadian companies, including small businesses, will continue to be able to take advantage of online commercial opportunities.
• Canada will continue to be able to regulate this sector in the public interest, including with regard to privacy.

Supplementary messages

• The CUSMA Parties agreed to not discriminate against or impose custom duties on online digital products.
• Ensures the cross-border flow of information and minimizes data localization while permitting necessary data protections.
• Includes protections for online user’s personal information as well as protection from fraudulent and deceptive commercial practices and spam.
• Ensures interactive computer services, such as Twitter, will be shielded against civil liability for harmful user-generated content uploaded to their platforms. These commitments will not prevent Canada from regulating in the public interest or enforcing any criminal law, nor do they require any changes to current practice.
• Canadian software suppliers will not be subject to arbitrary demands to transfer or provide access to their proprietary source code as a condition for selling or making available their software in CUSMA markets. Canadian regulatory or judicial authorities will continue to be able to review software source code, and its algorithms, for the purposes of a specific investigation, inspection, examination, enforcement action or judicial proceeding.

Supporting facts and figures

• Canada’s digital economy contributed 5.5% to GDP ($109.7 billion in 2017) and since 2010 job growth in the digital economy has been four times faster than the rest of the Canadian economy⁴.
• The value of Canada’s retail electronic commerce sales totalled $18 billion in 2018⁵. The value of global retail electronic commerce transactions totalled US$3.9 trillion (2017)⁶.
• The movement of data across borders is estimated to have raised world GDP by over 3.5% in the past decade⁷.

Background

Since the original NAFTA came into effect, the expansion of the internet has had a dramatic effect on our everyday lives. Modern communication tools give even small and medium-sized businesses a global reach.

Through the Canada-United States-Mexico Agreement (CUSMA), Parties have agreed to a set of rules that will facilitate economic growth and trade opportunities through the use of the internet, as well as address potential barriers to digital trade. These rules include, but are not limited to, commitments not to apply duties to products transmitted electronically, to protect personal information, and to cooperate on important security issues in electronic communications.

The CUSMA digital trade outcomes ensure that Canadian companies, including small and medium-sized enterprises, will be able to continue to take advantage of expanding online commercial opportunities, while also seeking to continue ensuring an online environment that builds consumer confidence and trust.

14. Data localization

Top line messages

• When countries impose data localization requirements, it creates unnecessary and costly burdens for companies, particularly small and medium-sized enterprises, and acts as a barrier to trade.
• The CUSMA data localization provisions will ensure that companies can move data across borders in a reliable and secure manner, while ensuring that legitimate privacy and security rights are protected.
• Canada will continue to be able to regulate in the public interest, including with regard to privacy.

Supplementary messages

• The digital trade chapter ensures that Canadian companies, including small and medium-sized enterprises, will be able to take advantage of expanding online commercial opportunities, while also seeking to ensure an online environment that builds consumer confidence and trust.

Responsive – Canada’s privacy law

• Canada’s commitments are consistent with its privacy law and will not prevent Canada from adopting enhanced privacy measures, provided that these measures treat domestic and foreign suppliers in an equivalent manner.
• These commitments do not apply to information held by a Party and, as such, will not affect the government’s laws, policies and regulations on how it chooses to protect government-held information.
• The commitments on the cross-border transfer of information only apply to the transfer of information for the purposes of a businesses’ operations, such as the storage or processing of information, and any “disclosures” of personal information to third parties must be done in accordance with Canada’s law.

Supporting facts and figures

• The movement of data and information across borders is estimated to have raised world GDP by over 10% in the past decade⁸.
• The economic costs of data localization measures are highest in countries or sectors most integrated into global value chains or with higher trade exposure.

Background

The CUSMA digital trade chapter includes two articles to address data localization restrictions: Article 19.11: Cross-Border Transfer of Information by Electronic Means; and, Article 19.12: Location of Computing Facilities.

These articles ensure that enterprises will not be subject to unnecessary restrictions affecting the cross-border transfer of information or the location of their computing facilities. These articles permit a Party to maintain measures for public policy objectives (understood to mean measures to protect the privacy and security of information) provided that the measures are not arbitrary, unjustifiably discriminatory, a disguised restriction on trade, and are necessary to meet the objective.

The provisions do not apply to government procurement or information held or processed by a Party. Commensurate provisions are included in the electronic commerce chapter of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Canadian industry stakeholders have strongly supported the inclusion of these articles to protect against data localization. During the negotiations, over 30 Canadian industry associations and businesses communicated their views that the digital trade chapter should include commitments on the cross-border transfer of information and location of computing facilities. Other stakeholders have raised concerns that these provisions may unduly restrict Canada from adopting stronger privacy provisions in the future; however, Canada has retained its flexibility to regulate in the public interest, including with respect to privacy. 

15. Source code and algorithms

Top line messages

• To protect the competitiveness of digital suppliers, Canadian software suppliers will not be subject to arbitrary demands to transfer or provide access to their proprietary source code as a condition for selling or making available their software in CUSMA markets.
• Canadian regulatory or judicial authorities will continue to be able to review software source code, and its algorithms, for the purposes of a specific investigation, inspection, examination, enforcement action or judicial proceeding.

Supplementary messages

Responsive – Software Source Code

• The commitment on software source code will protect Canadian software companies from arbitrary demands for review of its proprietary software source code, which could lead to their unauthorized disclosure.
• Canada’s commitments are consistent with its existing laws, policies and regulations regarding the importation, sale or use of software in Canada.
• These commitments will not prevent Canadian regulatory agencies or judicial authorities from reviewing as necessary software source code, including the algorithms expressed in that source code, to ensure compliance with Canadian laws and regulations.

Supporting facts and figures

• Global services exports of Canadian software, including royalties, reached $2.7 billion in 2018.⁹

Background

Article 19.16 (source code) of the CUSMA digital trade chapter ensures that software source code, including the algorithms expressed in that source code, will not be subject to unwarranted or arbitrary reviews by governmental authorities as a condition for importing, selling or using the software within its market. Canadian regulatory or judicial authorities will continue to be able to review software source code, and its algorithms, for the purposes of a specific investigation, inspection, examination, enforcement action or judicial proceeding.

Software companies typically place a high value on protecting the source code of their software as it represents valuable proprietary intellectual property. Unnecessary requirements to transfer or provide access to software source code by governmental authorities increases the risk that the source code could be disclosed (accidentally or intentionally) to competitors or other actors.

Canadian industry stakeholders have supported the inclusion of the article on software source code in CUSMA. Some stakeholders have asserted that this provision may unduly restrict Canada from reviewing software source code to ensure that it conforms with Canadian laws or policies, in particular, with respect to the algorithms used in burgeoning artificial intelligence technologies. However, the provision only applies to the conditions placed on the import, sale or use of software and will not affect the ability of a Party from reviewing a company’s software source code as necessary for the purposes of a specific investigation, inspection, examination, enforcement action, or judicial proceeding.

16. De minimis

Top line messages

• The CUSMA commitment will require a modest increase to Canada’s existing de minimis threshold for low-value courier shipments from the U.S. or Mexico, under which sales taxes and duties are not charged on imports.
• The increase to the threshold for the waiving of taxes from C$20 to C$40 is in line with inflation since the last change in 1992.
• The increase to the threshold for the waiving of customs duties from C$20 to C$150 raises Canada’s threshold to a level comparable to the increase agreed to by Mexico.

Supplementary messages

• Raising the de minimis threshold was a key U.S. demand.
• As the Government keeps reducing the administrative burden on courier companies, this should lower the service fees they charge to Canadians.

Responsive –retail sector impacts

• The Government recognizes this could present challenges for Canadian retailers and will work with them to ensure they have the tools they need to invest and grow.

Responsive – scope of commitment

• This bill implements the negotiated outcome of the Agreement, which pertains only to courier shipments imported from either the U.S. or Mexico.

Responsive –impacts on federal/provincial revenue

• The impact of an increased threshold on federal and provincial revenues was a key consideration underlying Canada’s opposition to this U.S. demand.

Supporting facts and figures

• Government supports streamlining customs processing – but waiving duties and sales taxes raises important equity, economic, and fiscal considerations.
• In particular, the de minimis threshold provides better treatment to foreign retailers than to domestic retailers, which must pay import duties and collect sales taxes on all imported goods and sales of any value – “national mistreatment”.
• An increased threshold will have negative fiscal impacts for federal and provincial governments in the form of foregone tariff and tax revenues.
• Benefits to Canadian retailers are likely to be negligible, given that they are typically restricted from exporting international brands outside of Canada, including the U.S. – a restriction not generally faced by U.S. retailers.

Background

Under current Canadian law, goods imported by courier or postal services with a value of C$20 or less have their customs duties and the GST/HST/PST waived – the “de minimis threshold”. This policy is under the purview of the Minister of Finance.

The CUSMA requires Canada to maintain a de minimis threshold for goods imported by courier from the other Parties: 

• Canada agreed to maintain a minimum threshold of at least C$150 for customs duties and C$40 for taxes at the point or time of importation. 
• The U.S. agreed to maintain its current US$800 threshold, which applies to customs duties only as the U.S. does not have a national sales tax, and state/local sales taxes are not collected at the border. 
• Mexico agreed to increase its threshold for customs duties from US$50 to US$117 (approximately C$150), but will maintain its current US$50 threshold for taxes. 

The CUSMA also includes a reciprocity footnote, which provides Parties with the flexibility to impose a lower de minimis threshold to shipments from another Party if they apply a lower threshold.

The Agreement’s obligations apply only to courier shipments (i.e., not postal shipments) imported from the other CUSMA parties, which is reflected in Canada’s implementation approach.

17. Culture

Top line messages

• Canadians have a strong national identity, a diverse population with Indigenous peoples and immigrant communities, as well as a vibrant francophone culture. Promoting a strong national identity remains an ongoing priority.
• In the CUSMA, Canada maintained the general exception for cultural industries, and preserved Canada’s flexibility to adopt and maintain programs and policies that support the creation, and distribution of Canadian artistic expression or content.
• The cultural exception ensures the Government of Canada can continue to promote and defend Canadian culture by fostering an environment in which diverse cultural content can be created and accessed, including in the digital environment, which is increasingly the medium for cultural industries.

Supplementary messages

Responsive – if asked whether artists and performers are covered under the temporary entry for business persons’ chapter

• Despite our strong efforts to secure additional access for Canadians, only an outcome that reflects the original NAFTA is possible at this time.
• While these commitments do not include artists and performers, the chapter maintains a temporary entry working group where such matters could be raised in the future.

Supporting facts and figures

• In 2017, Canada’s cultural industries accounted for more than 666,000 jobs and $53B of Canada’s gross domestic product¹⁰.
• In 2017, the United States has remained Canada's largest trading partner for culture products, representing over 60% of both culture exports and imports¹¹.

Background

In all its trade agreements, Canada seeks to maintain the ability to develop and implement domestic policies and programs that support Canadian cultural industries. This has been achieved through the inclusion of a general cultural exception in most of Canada’s FTAs, including NAFTA, or through the inclusion of exceptions and reservations for cultural industries in relevant chapters of the agreements (i.e. CETA, CPTPP).

The CUSMA maintains the general exception for Canada’s cultural industries and preserves flexibility to adopt and maintain measures that treat Canadian cultural industries more favorably than foreign ones through, for instance, tax credits, content quotas, or subsidies.

The CUSMA defines cultural industries as those engaged in the publication, distribution or sale of books, magazines, film, video and music, as well as broadcasting. The cultural industries exception is technologically neutral: it applies to both the physical and the digital environment.

The retaliatory clause, first introduced in NAFTA, remains in the CUSMA and allows the U.S. to take measures of “equivalent commercial effect.” Of note, Canada as well as Mexico can also use the retaliatory clause and equally challenge the U.S., if it adopts measures in cultural industries that would treat Canada less favorably.

18. Trade and Indigenous peoples

Top line messages

• One of Canada’s objectives in the negotiations was to better reflect the interests of Indigenous peoples in international trade.
• We undertook extensive engagement with Indigenous leaders and Indigenous representatives to inform our negotiating positions.
• We achieved key outcomes that protect policy flexibility for Indigenous peoples and Indigenous-owned businesses, and a general exception which clearly confirms that Constitutional commitments to Indigenous peoples cannot be superseded or undermined by FTAs obligations.

Supplementary messages

• Canada is committed to engaging with Indigenous peoples on how to better support their ability to benefit from international trade and investment.
• Policy flexibility has been retained to ensure Canada’s ability to create or maintain programs and set-asides that seek to advance the interests of Indigenous peoples and Indigenous-owned businesses, including in the areas of services, investment, environment, state-owned enterprises and government procurement.
• There are also important outcomes that reflect the important role of Indigenous peoples regarding the environment, including in the conservation of biodiversity.

Supporting facts and figures

• An Indigenous Working Group was formed in September 2017 with the objective of bringing together key Indigenous representatives and government officials to build trade policy capacity, engage in dialogue, and work collaboratively on elements of importance to Indigenous peoples in the NAFTA modernization process. The working group met regularly during the negotiations and included representatives of the National Indigenous Organizations and Modern Treaty partners, as well as Indigenous groups, business associations, and legal and policy experts.
• Indigenous representatives who have expressed support for the Indigenous-related outcomes in the CUSMA include National Chief Perry Bellegarde of the Assembly of First Nations, Kenneth Deer of the Haudenosaunee Confederacy, and the Native Women’s Association of Canada.

Background

In CUSMA, Canada was successful in achieving priority outcomes with respect to Indigenous peoples. Recognizing that Canada’s obligations to Indigenous peoples under the Canadian Constitution cannot be superseded or undermined by commitments under a free trade agreement (FTA), the government secured important clarity through a general exception to ensure that FTA obligations do not interfere with a country’s legal obligations toward Indigenous peoples.

In CUSMA, Canada retained policy flexibility to create or maintain programs or set-asides that seek to advance the interests of Indigenous peoples and Indigenous-owned businesses, including in the areas of services, investment, environment and state-owned enterprises. In addition to the carve-out related to Aboriginal harvesting of natural resources, the environment chapter includes provisions that recognize the important role of Indigenous peoples in the long-term conservation of the environment, sustainable fisheries and forestry management, and biodiversity conservation. The small and medium-sized enterprises (SME) chapter encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including Indigenous peoples, and promote their participation in international trade. A first for Canada’s FTAs, the textile and apparel goods chapter includes a provision under which handcrafted Indigenous textile and apparel goods are eligible for duty-free treatment pursuant to a special process.

Proposed Chapter on Trade and Indigenous peoples

On August 14, 2017 in an appearance before the Standing Committee on International and Trade, Minister Freeland stated that Canada would advance Indigenous interests in negotiating for a new NAFTA by seeking to include a chapter on trade and Indigenous peoples. This commitment was in line with the Government's commitment to improving its nation-to-nation relationship with Indigenous peoples. Global Affairs Canada, in cooperation with Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) and 10 other federal departments, worked concertedly to develop a proposed chapter text in collaboration with representatives of Indigenous governments, organizations and businesses.

The objectives of the chapter on trade and Indigenous peoples were to: recognize the important role of Indigenous peoples in trade, both historically and also in the context of facilitating sustainable growth and prosperity for Indigenous communities; and, facilitate cooperative activities between the Parties and enhance the ability of Indigenous peoples to participate in and benefit from the opportunities created by the FTA.

Canada’s proposed trade and Indigenous peoples chapter text was tabled during round 5 in November 2017 and discussed at the working group level at round 6 in January 2018. While Canada was not successful in obtaining support from the other two Parties for its inclusion in the final outcome, the discussions served to further the Parties’ understanding of issues of importance to Indigenous peoples and the text proposal has been used as the basis upon which to advance Canada’s interests in other negotiations.

19. Trade and gender

Top line messages

• Canada has made gender equality and women’s economic empowerment a top priority. This is reflected through Canada’s inclusive approach to trade.
• Canada played a leadership role in integrating gender-related provisions in the CUSMA, including with regard to discrimination in the workplace.
• Gender-specific provisions in CUSMA are important to help ensure that its benefits and opportunities are more widely shared among all Canadians.

Supplementary messages

• Gender-related outcomes were included in the preamble and in the labour, investment, and small and medium-sized enterprises (SME) chapters, including provisions related to corporate social responsibility and gender, and promoting women-led SMEs.

Responsive - Specifics of outcomes on gender

• The preamble affirms that the Parties have agreed to seek to facilitate women’s and men’s equal access to and ability to benefit from the opportunities created by this Agreement, and to support the conditions for women’s full participation in domestic, regional, and international trade and investment;
• The labour chapter includes a non-discrimination clause in respect of employment and occupation. It also encourages the adoption of programs and policies that address barriers to the full participation of women in the workforce and proposes cooperative activities that address gender-related issues in the field of labour, including gender equity.
• The investment chapter includes a corporate social responsibility (CSR) provision that reaffirms the importance of encouraging businesses to respect CSR standards on gender equality.
• The small and medium-sized enterprises (SME) chapter encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by women, and promote their participation in international trade.

Responsive - Why is there no dedicated gender chapter?

• Canada has made gender equality and women’s economic empowerment a key priority in recent trade negotiations.
• In the CUSMA negotiations, Canada played a leadership role in advancing issues of importance to trade and gender, but was unable to secure support for the inclusion of a dedicated Gender chapter.
• Canada was, however, successful in integrating gender-related provisions throughout the Agreement, including in the areas of labour, investment and SMEs.

Supporting facts and figures

• Women-owned businesses contribute $150 billion to the Canadian economy and employ over 1.5 million people. However, women-owned SMEs account for only 14.8% of Canadian SMEs exporting internationally.
• The 2018 Fall Economic Statement proposes $198 million in investments over six years to help Canadian businesses develop export plans, build global partnerships, and gain the skills needed to successfully export to markets around the world.
• Advancing women’s equality in Canada could add another $150 billion to Canada’s GDP by 2026.
• A 2015 World Bank survey found that most countries still maintain discriminatory laws, systemic business practices or business cultures that prevent women from fully participating in and reaping the benefits of international trade.
• Women entrepreneurs are underrepresented in high-technology manufacturing and knowledge-intensive sectors.
• Promoting gender equality and trade fosters sustainable development and women’s empowerment, which has positive socio-economic effects and contributes to sustainable economic growth.

Background

Canada’s commitment to gender equality and women’s economic empowerment is reflected in the advancement of an inclusive approach to trade that seeks to ensure the opportunities and benefits that flow from international trade and investment are more broadly shared. While not successful in including a dedicated trade and gender chapter in the Agreement, Canada was able to advance gender-related priorities in other areas of the Agreement.

The preamble affirms that the Parties have agreed to seek to facilitate women’s and men’s equal access to and ability to benefit from the opportunities created by this Agreement and to support the conditions for women’s full participation in domestic, regional, and international trade and investment;

The labour chapter includes a non-discrimination clause in respect of employment and occupation, and also encourages the adoption of programs and policies that address barriers to the full participation of women in the workforce and proposes cooperative activities that address gender-related issues in the field of labour, including gender equity.

The investment chapter includes a corporate social responsibility (CSR) provision that reaffirms the importance of encouraging businesses to respect CSR standards on gender equality.

The SME chapter encourages parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by women, and promote their participation in international trade.

20. Investor State Dispute Settlement (ISDS)

Top line messages

• The investment chapter has been modernized in a manner that ensures that an appropriate balance is achieved between the interests of all stakeholders.
• The new investment chapter is a good outcome for Canada as it contains a comprehensive and robust set of obligations.
• While these obligations will be subject to state-to-state dispute settlement, investors will no longer have recourse to investor-state dispute settlement to make claims against Canada under the Canada-United States-Mexico Agreement.

Supplementary messages

• For existing investments, NAFTA’s investor-state dispute settlement mechanism will continue to apply for 3 years after the entry into force of the CUSMA, but only for investments made while NAFTA was in force.
• An arbitration that has already been initiated prior to the NAFTA being superseded by CUSMA will be allowed to proceed to conclusion.
• Canadian investors will have recourse to the CPTPP’s investor-state dispute settlement mechanism for their investments in Mexico.
• This outcome reflects the unique North American context and Canada will continue to have investor-state dispute settlement with most of our other free trade agreement (and foreign investment promotion and protection agreement) partners.

Supporting facts and figures

• Since 1994, U.S. investors have been awarded or received settlements totalling $215 million from cases brought against Canada under NAFTA’s investment chapter (Chapter 11).
• Mexican investors have not brought any claims against Canada under the NAFTA.
• Canada is the NAFTA Party that has responded to the most claims under NAFTA’s investment chapter (Chapter 11) (Canada: 27, Mexico: 22, U.S.: 17).

Background

The objective of an investment chapter in a free trade agreement (FTA) is to establish a framework that provides investors with a predictable, stable, transparent and rule-based investment climate. It is intended to help ensure that Canadian investors are treated fairly and have an equal chance to compete for business abroad.

In the Canada-United States-Mexico Agreement (CUSMA), the investment chapter was updated to bring it into line with the recent treaty practices of the three Parties. The chapter contains a comprehensive and robust set of obligations similar to those found in other FTAs, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Agreement provides greater clarity on the right to regulate in the public interest and on the rights of investors.

Under CUSMA, Canada will not be subject to an ISDS mechanism. Instead, the United States and Mexico agreed to a bilateral ISDS mechanism for a narrow set of disciplines and sectors. The Parties also agreed to a transitional period of three years, during which ISDS under the original NAFTA will continue to apply only for investments made prior to the entry into force of the CUSMA.

Apart from this transition period for existing investments, U.S. investors will not be able to launch an ISDS claim against Canada; nor will Canadian investors be able to bring claims against the United States. It will still be possible to address potential breaches of obligations through the state-to-state dispute settlement mechanism, under which home governments may bring a claim on an investor’s behalf. Unlike ISDS, such claims cannot result in the award of damages. Canadian investors will be able to bring claims against Mexico under the CPTPP and Mexican investors will be able to bring claims against Canada under the CPTPP.

21. Government procurement (Buy America)

Top line messages

• Canadian suppliers’ existing access to the U.S. and Mexican procurement markets will be maintained and not diminished.
• Canada and the United States have agreed to maintain access to each other’s procurement markets via the World Trade Organization Agreement on Government Procurement (GPA).
• Canada and Mexico will rely on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) for access to each other’s markets.

Supplementary messages

• In the negotiations, the United States sought an outcome that would have provided less market access than NAFTA and that would have been worse than U.S. commitments in the WTO Agreement on Government Procurement (GPA).

Responsive - Buy American

• Canada will continue to have access to federal government procurement opportunities that are subject to U.S. “Buy American” provisions requiring the use of U.S. goods and services.

Supporting facts and figures

• U.S. commitments under the WTO Agreement on Government Procurement (GPA) go significantly beyond the NAFTA, including access for Canadian suppliers to procurement opportunities in 37 U.S. states.
• WTO GPA thresholds for goods and services more closely reflect Canada’s access to U.S. procurement opportunities, as U.S. contracts worth less than US$250,000 are reserved exclusively for U.S. small businesses.
• The WTO GPA thresholds provide more flexibility for Canadian procuring entities to develop and implement policies aimed at achieving socio-economic objectives.
• The WTO GPA and the CPTPP include updated procedural rules that reflect more current procurement practices, such as conducting some of the procurement process online (e.g. electronic tendering).
• Canada will continue to have access to covered federal government procurement opportunities where the U.S. requires the use of U.S. goods and services (“Buy American”).
• However, neither Canada nor Mexico will have new access to procurements where domestic content requirements apply to sub-central projects that have received federal financial assistance (“Buy America”).
• The U.S. Executive Order on Strengthening Buy American Preferences for Infrastructure Projects indicates that any resulting policy will comply with U.S. WTO GPA obligations. Departmental officials are monitoring the implementation of the Executive Order to ensure that this is the case.

Background

Canadian businesses had preferential access to the U.S. and Mexican procurement markets under NAFTA. While the CUSMA government procurement (GP) chapter applies only between Mexico and the U.S., Canada’s market access to the U.S. and Mexican procurement markets will be maintained via the WTO Agreement on Government Procurement (GPA) and CPTPP, respectively.

Canada and the U.S. agreed to maintain access to each other’s procurement markets via the WTO GPA, which entered into force in 2014 and includes more ambitious market access commitments than under NAFTA. For example, while neither the NAFTA nor the CUSMA provide sub-federal coverage, Canada has access to procurement opportunities in 37 U.S. states in the WTO GPA.

Canada and Mexico agreed to maintain access to each other’s procurement markets via the CPTPP. Canada’s access to Mexico’s procurement market under CPTPP is essentially the same as under the NAFTA. The CUSMA GP market access commitments between the U.S. and Mexico are consistent with those made between the two parties in the original NAFTA. Mexico is not a member of the WTO GPA.

22. Distilled spirits, wine, beer and other alcohol beverages

Top line messages

• The CUSMA contains provisions that reduce and streamline labeling requirements for wine and distilled spirits that will help reduce costs for Canadian exporters. 
• Also, the CUSMA provides protection of Canadian whisky as a distinctive product of Canada.
• The Agreement also prevents wineries from using the term “icewine” to market wine produced from grapes that were artificially frozen in industrial freezers.

Supplementary messages

• The Government of Canada is a strong supporter of Canada’s wine industry and has vigorously defended its interests to ensure a fair global trading environment.
• The CUSMA will benefit exporters by preserving duty free access to North American markets for alcoholic beverages.
• Other positive outcomes on wine are that Ontario and B.C. are allowed to continue operating stores that sell only their own products; and Quebec may also continue to require that all wine sold in grocery and convenience stores be bottled in that province.

Supporting facts and figures

• In 2018, the total Canadian exports of alcoholic beverages including distilled spirits, wine and beer to the United States and Mexico was $887.5 million CAD.
  • To the United States – $885.8 million CAD
  • To Mexico – $1.8 million CAD
• In 2018, the total imports of alcoholic beverages including distilled spirits, wine and beer from the United States and Mexico to Canada was $1.95 billion CAD.
  • From the United States – $1.75 billion CAD
  • From Mexico – $204.3 million CAD

Background

During CUSMA negotiations of the annex on distilled spirits, wine, beer and other alcohol beverages, Canada was successful in maintaining the original NAFTA exceptions to national treatment obligations for certain Canadian practices that are very important to our industry and provinces. Specifically, Ontario and B.C. are allowed to continue operating stores that sell only their own products; and Quebec may also continue to require that all wine sold in grocery and convenience stores be bottled in that province.

23. Natural water resources

Top line messages

• Fresh water is a precious natural resource, and the Government of Canada has put in place domestic measures to prevent the removal of water in bulk from Canadian watersheds.
• A Canada-U.S. side letter to the CUSMA confirms that Canada is not obliged to exploit its water for commercial use.

Supplementary messages

• Canada has not assumed obligations under any trade agreement, including CUSMA, which would require it to allow bulk water extractions or diversions for export, or made commitments related to the collection, purification and distribution of water.
• A Canada-U.S. side letter, published with the treaty and forming an integral part of it, confirms that Canada is not obliged to exploit its water for commercial use, including bulk water exports.
• CUSMA also removes two provisions on “continuing supply”. Some have argued that these provisions would require Canada to continue to ship bulk water it if ever begins to do so, but this has never been the Government’s interpretation.
• Other provisions in the CUSMA text itself confirm Canada’s ability to take measures for legitimate public policy interests. In addition, the environment chapter includes commitments for the Parties to maintain high environmental standards, including in relation to matters such as the protection of water.

Background

The original NAFTA did not have any obligations that constrained the ability to regulate natural water or prevent bulk water exports. Nevertheless, some civil society stakeholders remained concerned that such constraints existed. As a result, after signature of the original NAFTA, but before its entry into force, the three Parties agreed on a Declaration on Water Resources that confirmed that natural water was not subject to obligations in the Agreement.

Canada and the U.S. carried forward the intent of the NAFTA declaration in the form of a side letter that emphasizes that CUSMA creates no rights to the natural water resources of a Party to the Agreement, and that the Agreement does not oblige a Party to exploit its water for commercial use, including its withdrawal, extraction, or diversion for export in bulk. Furthermore, from a services perspective, Canada’s market access obligations for cross-border trade in services and investment in CUSMA are consistent with those in the General Agreement on Trade in Services (GATS) at the World Trade Organization (WTO), where Canada does not have any commitment on the collection, purification and distribution of water.

24. Energy

Top line messages

• The CUSMA energy provisions will support deeper integration in the North American energy market and enhance Canada’s energy competitiveness.
• New energy-specific commitments between Canada and the U.S. will also provide for enhanced regulatory transparency and cooperation in the energy sector, and include disciplines with respect to access to electric transmission facilities and pipeline networks.
• The Agreement does not include provisions related to the security of supply of energy goods (known as the “energy proportionality clause”).

Supplementary messages

• The CUSMA preserves the longstanding U.S. commitment from the Canada-U.S. FTA which ensures that the Bonneville Power Administration affords BC Hydro treatment that is no less favourable than that afforded to utilities located outside of the Pacific Northwest.
• The new Agreement includes a rule of origin amendment to allow up to 40% of non-originating diluent in pipelines when moving crude oil, a longstanding Canadian industry request. This will resolve a technical issue that had previously added upwards of $60 million a year in duties and other fees, which served as an unnecessary and burdensome cost to Canadian businesses.
• The new Agreement enhances transparency regarding Mexico’s services and investment-related commitments in the energy sector.
• It also recognizes the Parties’ interest in harmonizing energy-efficiency performance standards and test procedures with the view of facilitating trade.

Supporting facts and figures

• In 2018, energy products accounted for approximately 19% of Canada`s global goods exports.
• In 2018, Canada’s energy sector directly employed more than 269,000 people and indirectly supported over 550,500 jobs.
• Including indirect activities, the energy sector also accounts for over 11% of Canada’s nominal GDP in 2018.

Background

The CUSMA does not include the provision known as the “energy proportionality clause.” Under NAFTA’s “energy proportionality clause”, if either the U.S. or Canada imposed an export restriction on an energy good, it had to ensure that customers in the other country had the opportunity to bid on a proportion of the total available supply of the particular good that was equivalent to their share of recent exports from the country introducing the restriction. This clause was never invoked but created some concerns regarding energy sovereignty.

The CUSMA contains a bilateral Canada-U.S. side letter on energy. It will provide for enhanced regulatory transparency and cooperation in the North American energy sector, and include disciplines with respect to access to electric transmission facilities and pipeline networks.

D. Stakeholder engagement

25. Stakeholder engagement overview

Key messages

• The Government of Canada is committed to transparency, inclusiveness and openness in free trade agreement negotiations.
• Throughout the CUSMA negotiations, we engaged proactively with a variety of stakeholders and partners, including provinces and territories, businesses and business associations, labour organizations, women, youth, Indigenous peoples and representatives, civil society organizations, and academics. The views gathered through this process informed Canada’s positions in the negotiations.
• From February 2017 to December 2019, the Government engaged with over 1,300 stakeholders through nearly 1,100 interactions on NAFTA modernization.
• We will continue to engage directly with a wide array of stakeholders and partners as we work towards implementation.
• Canadian stakeholders have been largely supportive of the new Agreement and have underlined the importance of securing stability and predictability in our commercial relationship with the United States.

Quotations

“[The Canadian Manufactures and Exporters] worked closely with the government throughout the negotiation to ensure the integrated manufacturing sector would remain unharmed and strengthened where possible. We believe CUSMA has accomplished this objective.”
– Dennis Darby, President and CEO of the Canadian Manufacturers and Exporters (December 10, 2019)

“The Canadian Chamber of Commerce welcomes the announcement that negotiations have concluded on updating the CUSMA. North America will always remain Canada’s most important trade relationship, and today’s progress is a crucial milestone for Canadian businesses.”
– Mark Agnew, Canadian Chamber of Commerce (December 10, 2019)

“The ratification of CUSMA eliminates significant trade uncertainty from the Canadian economy. [R]educing uncertainty in the relationship will be a boost for the Canadian economy.”
– Brian Kingston, Vice-President International and Fiscal Issues of the Business Council of Canada (June 18, 2019)

“[Canada] won, in the sense that we have an objective dispute settlement mechanism that puts all trade disputes into the hands of a group that is not wedded to the interests of a single party.”
– Atif Kubursi, professor emeritus of economics at McMaster University and president of Econometric Research Ltd. (October 28, 2019)

“By modernizing NAFTA and maintaining its trilateral structure, the agreement has the potential to enhance Canadian and North American competitiveness for many years to come. The agreement provides much-needed certainty and clarity for investors in all three countries, enabling companies to move forward with job-creating projects and expansion plans.”
– The Hon. John Manley, former President and CEO of the Business Council of Canada (October 1, 2018)

Background

The Government of Canada initiated broad public engagement with Canadians to solicit views on the modernization of the North American Free Trade Agreement (NAFTA) in February 2017. The Government proactively developed a stakeholder engagement plan and reached out to key stakeholder groups, including in the areas of infrastructure and government procurement, services, agriculture and agri-food, automotive, automotive parts, labour, metals, energy, transportation services, and culture as well as Indigenous peoples and representatives, and civil society. In addition, the Government of Canada has used broad-based mechanisms, including soliciting formal written submissions on NAFTA modernization through a Canada Gazette process, as well as a dedicated online NAFTA website.

The Government worked closely with provincial and territorial governments, whose representatives were invited to travel to the location of each negotiating round to receive daily debriefs from the Chief Negotiator and members of the negotiating team. The views gathered through this process informed Canada’s positions in the negotiations.

An Indigenous Working Group was formed to work collaboratively on elements of importance to Indigenous peoples in the NAFTA modernization process. The working group met regularly during the negotiations and included representatives of the National Indigenous Organizations, Modern Treaty partners, Indigenous groups, business associations, and legal and policy experts. In total, the Government of Canada met with representatives from 49 different Indigenous groups, including self-governing nations and tribal organizations, national organizations, development corporations, business and lending organizations, legal advisors and policy experts.

Between February 2017 and December 2019, the Government of Canada interacted directly with over 1,300 stakeholders to hear their views on the modernization of NAFTA, and to provide updates on the negotiations and next steps. The chart below provides an overview of sectoral representation as well as engagement mechanisms used throughout the stakeholder engagement process. Over the same period, the Government received over 47,000 submissions from Canadians on the NAFTA modernization.

What we heard

With respect to the negotiations, most Canadians advocated for a “do no harm” approach and viewed the modernization of NAFTA as an opportunity to enhance the stability and predictability in the North American market and the efficiency of cross-border trade.

Following the conclusion of the negotiations, Canadian stakeholders have been largely supportive of the new Agreement and have underlined the importance of securing stability and predictability in our commercial relationship with the United States.

In the dairy, poultry and egg sectors, the outcomes have been viewed more negatively, with major supply-managed organizations being critical of Canada providing new market access to the U.S., in addition to what had already been provided in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Comprehensive Economic and Trade Agreement (CETA).

On intellectual property, stakeholders’ reactions have been mixed; several rights-holders, particularly from the creative industries, have expressed favourable views with respect to extending copyright term for works of authorship, while stakeholders representing user interests have expressed concern.

On January 23, 2020, premiers issued a press release stating their unanimous support for the Agreement and calling for its implementation as soon as possible, including the commitment by the federal government to provide full and fair compensation for supply managed farmers and processors.

26. Autos

Key messages

• Throughout the negotiations, we engaged proactively with a variety of stakeholders and partners, including provinces and territories, businesses and industry associations, labour organizations, women, youth, Indigenous peoples, civil society organizations, and academics. The views gathered through this process informed Canada’s positions in the negotiations.
• From February 2017 to December 2019, the Government engaged with over 40 stakeholders from across the auto sector (including manufacturers, parts suppliers, importers, industry associations, retailers, and workers) through over 90 in-person interactions on NAFTA modernization.
• Canadian auto and auto parts stakeholders have been strongly supportive of the CUSMA, highlighting the preserved market access to the U.S., as well as the side letter on potential Section 232 tariffs for autos and auto parts as major wins for Canada.

Quotations

“The [CUSMA] is the best trade agreement ever signed for the Canadian auto supply sector.”
– Flavio Volpe, President of the Automotive Parts Manufacturers Association of Canada (December 16, 2019)

“CUSMA will help strengthen Canada’s relationship with its main trading partner, the United States, The agreement will bring significant benefits to the Canadian economy as a whole and to our industry.”” – Jean Simard, President and CEO of the Aluminium Association of Canada (December 13, 2019)

 “This is a vital trade agreement for Canada, and its domestic automotive manufacturing industry, as it brings greater certainty regarding North American trade rules.”
– Mark Nantais, President of the Canadian Vehicle Manufacturers’ Association (December 11, 2019)

“JAMA Canada, while seeing the need for careful review of the final legal text, is encouraged by the successful conclusion of negotiations toward a modernized NAFTA.”
– Japan Automobile Manufacturers Association of Canada (October 1, 2018)

“We stand ready to be a collaborative partner to ensure this agreement is ratified in all three markets because it will support an integrated, globally competitive automotive business in North America. The benefits of scale and global reach will help to drive volume and support manufacturing jobs.”
– Joe Hinrichs, Executive Vice-President and President Global Operations of the Ford Motor Company (October 1, 2018)

"The [Canada-United States-Mexico Agreement] will continue to provide our members - which have a footprint in all three countries - with preferential access to the U.S. market. Importantly, the agreement also provides protection for Canada's automotive industry from U.S. 232 national security tariffs."
– David Adams, President of Global Automakers of Canada (October 1, 2018)

Background

The Government of Canada initiated broad public engagement with Canadians to solicit views on the modernization of the NAFTA in February 2017. The Government proactively developed a stakeholder engagement plan and reached out to key stakeholder groups, including in the areas of automotive, automotive parts, infrastructure and government procurement, services, agriculture and agri-food, labour, metals, energy, transportation services, and culture as well as Indigenous peoples, and civil society. In addition, the Government of Canada has used broad-based mechanisms, including soliciting formal written submissions on NAFTA modernization through a Canada Gazette process, as well as a dedicated online NAFTA website.

Between February 2017 and December 2019, the Government of Canada engaged directly with over 40 auto stakeholders in over 90 in-person interactions to hear their views on the modernization of NAFTA, and to provide regular updates on the negotiations and next steps. Canadian officials engaged directly with a wide range of stakeholders in the automotive sector on a regular basis, including the vehicle and parts sector industry associations, Canada’s five automakers, Canadian parts producers, and Unifor, the union that represents many workers in the sector.

Stakeholders engaged included (illustrative list)

• Canadian Vehicle Manufacturers Association (CVMA)
• Automotive Parts Manufacturers Association (APMA)
• Japan Automobile Manufacturers Association (JAMA) Canada
• Global Automakers Canada
• Ford Motor Company of Canada
• General Motors Canada
• Fiat Chrysler Automobile Canada
• Honda Canada
• Toyota Canada
• Martinrea International Inc.
• Magna International
• Linamar Corporation
• Unifor
• Aluminium Association of Canada
• Canadian Steel Producers Association

What we heard

The auto industry has been very supportive of the negotiated outcomes on autos, highlighting that the Agreement preserved market access to the U.S., and recognized the integrated nature of the North American supply chain.

While noting that there will be compliance and other costs associated with the rules of origin requirements for vehicles, the industry welcomes the certainty that the new Agreement will provide. The parts sector is particularly optimistic that the requirements could lead to new opportunities. The labour value content requirement has also received support as it will help level the playing field with Mexico in terms of future investments in the sector. 

The auto industry also supports the side letter on Section 232 tariffs for autos and auto parts, seeing it as a very strong insurance policy against the protectionism of the U.S. administration.

27. Agriculture (including Supply Managed Sectors)

Key messages

• From February 2017 to December 2019, the Government engaged with over 275 agriculture and agri-food stakeholders through nearly 300 in-person interactions on NAFTA modernization.
• We will continue to engage directly with agriculture stakeholders as we work towards implementation.

Quotations

Canadian agriculture and agri-food stakeholders have largely been supportive of the new Agreement:

“We have an extremely integrated market, so we were very pleased to see that the new NAFTA has the same provisions as the other one. That means open and free trade between our three countries. It certainly did take a lot of work but it’s an extremely important trade agreement and it was important that we all got it right.”
– Fawn Jackson, Senior Manager of Government and International Relations of the Canadian Cattlemen’s Association (December 17, 2019)

 “We applaud the leaders of all three countries in re-negotiating a comprehensive and high-standard agreement that will ensure North America continues to create jobs and opportunities for people in all three countries, and takes our free trade platform to the next level.”
– Dan Darling, President of the Canadian Agri-Food Trade Alliance (December 10, 2019)

Nonetheless, stakeholders in the supply-managed sectors have expressed concerns about the additional market access granted under CUSMA, while acknowledging the difficulty of the negotiations:

“The signing of the Canada-United States-Mexico Agreement (CUSMA) is a sad chapter in Canada’s dairy industry and for Canadian exporters. The access to our country’s dairy market given to the U.S. represents a significant loss, the equivalent of the combined dairy production of New Brunswick and Nova Scotia.”
– Pierre Lampron, President of Dairy Farmers of Canada (December 11, 2019)

“While Canada's supply management system remains in place, CUSMA further opens up our domestic market to egg imports. This will have a lasting impact, particularly on our young farmers who are making a start in the industry, and on the vast majority of Canadian consumers who prefer to purchase Canadian eggs.”
– Roger Pelissero, Chairman of Egg Farmers of Canada (June 18, 2019)

“Feeling pressured by its partners’ agenda and faced with the volatile mood of the U.S. President, Canada did what it could to protect its interests and reach not a good agreement, but the least bad one under the circumstances.” [Translation]
– Marcel Groleau, President of Quebec’s Union des producteurs agricoles (October 10, 2018)

"While there is more being given to the already substantial market access in our sector, we look forward to working with the Government of Canada in order to implement changes that are in the best interest of Canada's chicken farmers."
– Benoît Fontaine, Chair of the Chicken Farmers of Canada (October 1, 2018)

Background

The Government of Canada initiated broad public engagement with Canadians to solicit views on the modernization of the North American Free Trade Agreement (NAFTA) in February 2017. The Government proactively developed a stakeholder engagement plan and reached out to key stakeholder groups, including in the areas of agriculture and agri-food, infrastructure and government procurement, services, automotive, automotive parts, labour, metals, energy, transportation services, and culture as well as Indigenous peoples, and civil society.

In addition, the Government of Canada has used broad-based mechanisms, including soliciting formal written submissions on NAFTA modernization through a Canada Gazette process, as well as a dedicated online NAFTA website.

Between February 2017 and December 2019, the Government of Canada engaged directly with over 275 stakeholders from the agriculture and agri-food sectors through nearly 300 in-person interactions to hear their views on the modernization of NAFTA, and to provide updates on the negotiations and next steps. For example, AAFC regularly and on an as-needed basis updated agriculture industry stakeholders on the NAFTA modernization, in person or via teleconference, including through the Agriculture Trade Negotiations Consultations Group and debriefs on the ground during negotiating rounds, to ensure that Canada’s approach was fully informed by the interests of our numerous subsectors.

Among these stakeholders, over 55 were organizations involved in the supply-managed subsectors (dairy, poultry, egg, and related processors), and over 230 were categorized as “others” as they cover a wide range of agriculture subsectors, including grain and oilseeds, meat, sugar, fruit and vegetables, and related processors.

Stakeholders engaged included (illustrative list)

• Dairy Farmers of Canada
• Dairy Processors Association of Canada
• Chicken Farmers of Canada
• Egg Farmers of Canada
• Turkey Farmers of Canada
• Canadian Hatching Egg Producers
• Union des producteurs agricoles (UPA)
• Canadian Agri-Food Trade Alliance (CAFTA)
• Canadian Canola Growers Association
• Canadian Pork Council
• Canadian Sugar Institute
• Canadian Horticultural Council
• Canadian Cattlemen’s Association
• Canadian Federation of Agriculture
• Canadian Vintners Association
• Spirits Canada
• Beer Canada
• Canadian Produce Marketing Association
• Fertilizer Canada

What we heard

Canadian agriculture and agri-food stakeholders have largely been supportive of the new Agreement and have underlined the importance of securing stability and predictability in our commercial relationship with the United States. This is particularly the case for the Canadian export-oriented farmers and processors.

In the supply-managed subsectors (dairy, poultry and egg), the outcomes have been viewed more negatively, with major organizations being critical of Canada providing new market access to the U.S. in addition to what had already been provided in CPTPP and CETA, as well as of Canada’s acceptance of pricing and export disciplines affecting the dairy sector.

The Government has proactively engaged with the supply-managed subsectors and has made a commitment to fully and fairly support supply-managed farmers and processors for all loss of market share. To this end, engagement with industry through dairy, poultry and egg working groups were initiated to look at providing support and helping the industries adjust to recent trade agreements. The overall goal is to ensure that Canada maintains its robust dairy, poulty and egg industries – now and in the future. 

28. Culture

Key messages

• Throughout the CUSMA negotiations, we engaged proactively with a variety of stakeholders and partners, including provinces and territories, business and business associations, labour organizations, women, youth, Indigenous peoples, civil society organizations, and academics. The views gathered through this process informed Canada’s positions in the negotiations.
• From February 2017 to December 2019, the Government engaged with over 60 stakeholders from across the creative sector, including artists, performers, creators, producers, publishers, distributors, and broadcasters, through over 30 in-person interactions on NAFTA modernization.
• Canadian creative sector stakeholders have been supportive of the modernized Agreement, considering the preservation of the general exception for culture as a significant win for Canada, particularly as it applies equally to the digital environment.
• More than ten industry associations issued press releases, welcoming the general cultural exception included in CUSMA. According to the majority of industry associations, a continued cultural exception provision is crucial in ensuring that Canadians have access to quality Canadian content, and that Canada’s creative industries continue to grow.

Quotations

Creative sector stakeholders have been supportive of the outcome:

“The cultural exemption section, which allows Canada to protect its cultural policies such as Canadian content rules from NAFTA's market disciplines, has been strengthened. We and several prominent authors, publishers and artists, including Susan Swan, Margaret Atwood and Michel Tremblay, asked for the protection to remain and to be expanded. These protections have been kept and now include digital cultural works such as Netflix productions, video games and online culture that were not protected under the original NAFTA.”
– Sujata Dey, campaigner for the Council of Canadians (December 17, 2019)

“From the beginning of the negotiations the Government of Canada identified the maintenance of the cultural exception as a key priority, and Canadian book publishers are delighted that this goal was achieved. The [CUSMA] will continue to provide government the flexibility to create effective cultural programs and policies, to encourage the future production and distribution of Canadian content in all formats.”
– Kate Edwards, Executive Director of the Association of Canadian Publishers. (October 2, 2018)

“We are delighted that Canada did not make any concessions regarding culture in the [Canada–United States–Mexico Agreement (CUSMA)]. The general exemption will also be applied unambiguously to the digital sector. The audio-visual industry, which is an important reflection of Canadian culture, would have been at risk had concessions been made in these negotiations.” [Translation]
– Hélène Messier, President and Chief Executive Officer of the Association québécoise de la production médiatique (AQPM) (October 2, 2018)

“Throughout the NAFTA negotiations, the federal government consistently identified cultural exemption as a key priority. In securing this exemption in the new agreement, Prime Minister Trudeau, Minister Freeland, and the entire negotiating team have stood tall for Canada and defended our cultural sovereignty.”
 – Reynolds Mastin, President and CEO of the Canadian Media Producers Association (CMPA) (October 1, 2018)

“Telefilm Canada is very pleased that the newly-negotiated US-Mexico-Canada Agreement (USMCA) will retain the cultural exemption clause, ensuring that our cultural products reflect our national identity in all of its diversity – including our two official languages and Indigenous communities.”
– Christa Dickenson, Executive Director of Telefilm Canada (October 1, 2018)

Background

The Government of Canada initiated broad public engagement with Canadians to solicit views on the modernization of the North American Free Trade Agreement (NAFTA) in February 2017. The Government proactively developed an engagement plan and reached out to key stakeholder groups, including in the areas of culture, infrastructure and government procurement, services, agriculture and agri-food, automotive, automotive parts, labour, metals, energy, and transportation services as well as Indigenous peoples, and civil society. In addition, the Government of Canada has used broad-based mechanisms, including soliciting formal written submissions on NAFTA modernization through a Canada Gazette process, as well as a dedicated online NAFTA website.

Between February 2017 and December 2019, the Government of Canada engaged directly with over 60 creative sector stakeholders in over 30 in-person interactions to hear their views on the modernization of NAFTA, and to provide regular updates on the negotiations and next steps. Notably, the cultural stakeholders were invited to contribute to the negotiations through an industry-specific roundtable which included representatives from all areas of the sector such as artists, performers, creators, producers, publishers, distributors, and broadcasters.

Stakeholders engaged included (illustrative list)

• Canadian Federation of Musicians
• Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)
• Canadian Media Producers Association
• Association québécoise de l’industrie du disque, du spectacle et de la vidéo (ADISQ)
• Canadian Independent Music Association (CIMA)
• Magazines Canada
• Association des professionnels de l'édition musicale (APEM)
• Association of Canadian Publishers
• Rogers Communications
• Shaw Communications
• Bell Canada Inc.
• Quebecor Media Inc.

What we heard

Creative sector stakeholders have been supportive of the outcome, noting that the cultural exception is crucial. More than ten cultural industry associations issued press releases, welcoming the general cultural exception.

Some stakeholders sought clarification and reassurance that the cultural exception would be applicable in the digital environment, while a few expressed concern about the retaliatory clause that would be available to the U.S. and Mexico. The retaliatory clause was part of NAFTA and is maintained in CUSMA. It allows a Party to retaliate by taking a measure of equivalent commercial effect if another Party takes an action with respect to a cultural industry that is inconsistent with the obligations of the Agreement.

Creative sector stakeholders have also been largely supportive of the outcomes on copyright, which are comparable to the protections enjoyed by creators in our major trading partners.

29. Indigenous stakeholders

Key messages

• The Government undertook extensive engagement with Indigenous leaders and representatives to inform Canada’s negotiating positions.
• An Indigenous Working Group was formed to work collaboratively on elements of importance to Indigenous peoples in the NAFTA modernization process.
• The working group met regularly and included representatives of the National Indigenous Organizations, Modern Treaty partners, Indigenous groups, business associations, and legal and policy experts.
• In total, the Government of Canada met with representatives from 49 different Indigenous groups, including self-governing nations and tribal organizations, national organizations, development corporations, business and lending organizations, legal advisors and policy experts.

Quotations

Indigenous groups and organisations have broadly been supportive of the new NAFTA:

“The new NAFTA (CUSMA) is the most progressive and inclusive trade agreement to date. It’s good for #FirstNations and Canada. Involving #Indigenous peoples & respecting our rights leads to better outcomes and greater economic certainty.”
– Perry Bellegarde, AFN National Chief (July 16, 2019)

"There are many opportunities for First Nations to benefit under this trade agreement with the U.S. and Mexico in ways that respect and protect our rights, including inter-nation trade with our brothers and sisters in the United States. . . . This agreement sets the tone for other international trade agreements to be inclusive of Indigenous peoples and to ensure recognition of our rights."
– Perry Bellegarde, AFN National Chief (May 30, 2019)

"NWAC is encouraged by the inclusion of Article 32.5 of the new [CUSMA], an exception provision that will ensure that the agreement will not undermine the ability of the parties to fulfill their legal obligations to Indigenous peoples. NWAC congratulates the Government of Canada in successfully negotiating for the inclusion of [these] provisions, as trade can have serious implications for the rights and interests of Indigenous peoples, particularly Indigenous women and children.”
– Native Women’s Association of Canada (NWAC) (October 3, 2018)

 “[CUSMA is] a step up and it brings attention to Indigenous peoples in this new agreement, attention that wasn't there in the NAFTA agreement.”
– Kenneth Deer, representative for the Haudenosaunee Confederacy and Indigenous World Association (October 1, 2018)

Background

On August 14, 2017 in an appearance before the Standing Committee on International Trade, Minister Freeland stated that Canada would advance Indigenous interests in NAFTA by seeking to include a chapter on Trade and Indigenous peoples. This commitment was in line with the Government's commitment to improving its nation-to-nation relationship with Indigenous peoples.

Global Affairs Canada, in cooperation with Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) and 10 other federal departments, developed a proposed chapter text in collaboration with representatives of Indigenous governments, organizations and businesses.

The objectives of the chapter on trade and Indigenous peoples were to: recognize the important role of Indigenous peoples in trade, both historically and also in the context of facilitating sustainable growth and prosperity for Indigenous communities; and, facilitate cooperative activities between the Parties and enhance the ability of Indigenous peoples to participate in and benefit from the opportunities created by the FTA.

While Canada was not successful in obtaining support from the other two Parties for the inclusion of the chapter in the Agreement, the proposal served to further the Parties’ understanding of issues of importance to Indigenous peoples and has been used as the basis upon which to put forward proposals in other negotiations such as Mercosur and the Pacific Alliance.

In CUSMA, Canada was successful in achieving priority outcomes with respect to Indigenous peoples, in line with the government’s efforts to advance Indigenous rights, prosperity and sustainable development in Canada and around the world.

The National Chief of the Assembly of First Nations and the President of the Inuit Tapiriit Kanatami participated in Ministerial NAFTA councils (Foreign Affairs and Environment and Climate Change respectively).

Outside of the Indigenous Working Group meetings, the Government of Canada also met with a number of representatives of Indigenous governments, regional assemblies of Chiefs and business associations in its cross-country outreach on the NAFTA modernization process.

National Indigenous Organizations engaged:

• Assembly of First Nations
• Métis National Council
• Inuit Tapiriit Kanatami
• Congress of Aboriginal Peoples
• Native Women’s Association of Canada

Modern treaty signatories engaged (illustrative list):

• Shishalh Nation (British Columbia)
• Kluane First Nation (Yukon)
• Sioux Valley Dakota Nation (Manitoba)

Development corporations and business and lending organizations engaged (illustrative list):

• Kahnawake’s Economic Development Corporation
• National Aboriginal Capital Corporations Association
• Canadian Council for Aboriginal Business
• National Indigenous Economic Development Board

National organizations, legal advisors, policy analysts engaged (illustrative list):

• International Inter-Tribal Trade and Investment Organization
• Indigenous World Association
• Paul Joffe, human rights attorney, representative of the Grand Council of the Crees, UN Declaration on the Rights of Indigenous Peoples (UNDRIP) expert

30. Unions

Key messages

• Throughout the CUSMA negotiations, we engaged proactively with a variety of stakeholders and partners, including provinces and territories, businesses and business associations, labour organizations, women, youth, Indigenous peoples, civil society organizations, and academics. The views gathered through this process informed Canada’s positions in the negotiations.
• Canadian labour officials have engaged with labour stakeholders regularly throughout the CUSMA negotiations.
• From February 2017 to December 2019, the Government engaged with over 30 labour unions from various sectors through over 50 in-person interactions on NAFTA modernization.

Quotations

Stakeholder views from unions on the modernized Agreement have been mixed. Some stakeholders such as Unifor and Canadian Labour Congress, expressed support:

“This new NAFTA really deals with labour standards in Mexico in a serious and significant way.”
– Jerry Dias, National President of Unifor (December 11, 2019)

“[CUSMA] restores Canada’s sovereignty over oil and gas production and, demands stronger protections of independent trade unions and collective bargaining in Mexico . . .”
– Jerry Dias, National President of Unifor (September 16, 2019)

“Workers across the country will be happy to learn that NAFTA’s Chapter 11 has finally been eliminated from this trade agreement.”
– Hassan Yussuf, President of the Canadian Labour Congress (October 1, 2018)

Others have expressed mixed or negative views about the CUSMA outcomes, including Canada’s concessions in the areas of environment, the right to regulate in the public interest, steel and supply management:

“No one should be fooled by these minor and largely insignificant improvements,” said Larry Brown, NUPGE President. One year ago we expressed our opposition to the new NAFTA agreement because it enshrined a number of provisions that will undermine regulatory protection in the public interest, harm workers, imperil Canada’s food production system, and exacerbate global climate change.”
– Larry Brown, President of the National Union of Public and General Employees (December 19, 2019)

“During that seven-year period [before the melt-and-pour requirement begins], it will continue to be the case that foreign steel could make its way into the automotive supply chain.”
– Mark Rowlinson, assistant national director for The United Steelworkers (December 12, 2019)

“Teamsters in both Canada and the United States have been working tirelessly to ensure the new NAFTA works for workers. This new trade agreement makes progress in some key areas, like labour and dispute settlement, but raises serious concerns on dairy.”
– François Laporte, President of Teamsters Canada (October 1, 2018)

Background

The Government of Canada initiated broad public engagement with Canadians to solicit views on the modernization of the North American Free Trade Agreement (NAFTA) in February 2017. The Government proactively developed a stakeholder engagement plan and reached out to key stakeholder groups, including in the areas of labour, infrastructure and government procurement, services, agriculture and agri-food, automotive, automotive parts, metals, energy, transportation services, and culture as well as Indigenous peoples, and civil society. In addition, the Government of Canada has used broad-based mechanisms, including soliciting formal written submissions on NAFTA modernization through a Canada Gazette process, as well as a dedicated online NAFTA website.

Between February 2017 and December 2019, the Government of Canada engaged directly with over 30 labour unions across various sectors in over 50 in-person interactions to hear their views on the modernization of NAFTA, and to provide regular updates on the negotiations and next steps. Notably, several Canadian labour unions also travelled regularly to negotiating rounds and received updates from negotiators.

Stakeholders engaged included (illustrative list)

• Canadian Labour Congress
• Unifor
• United Steelworkers
• Teamsters Canada
• Confédération des syndicats nationaux (CSN)
• Fédération des travailleurs et travailleuses du Québec (FTQ)
• Public Service Alliance of Canada
• National Union of Public and General Employees
• Canadian Union of Public Employees (CUPE)

What we heard

Views from unions on the modernized Agreement have been mixed. On autos, views have been largely supportive and seen as a win for Canada, particularly as it relates to the labour value content requirements. While the majority applauds the elimination of ISDS and the comprehensive and enforceable labour chapter as significant improvements over the original NAFTA side agreement on labour, some have been more critical and underlined concessions on dairy and environment as important setbacks for Canada.

Unions reacted positively to the inclusion of a number of key provisions in the labour chapter that support the advancement of fair and inclusive trade, such as articles that address violence against workers exercising their labour rights, provide protection for migrant workers, and prohibit the importation of goods produced by forced or compulsory labour. However, labour unions reacted negatively to the changes that were made to the gender article after the September 30, 2018 conclusion of the negotiations, as the article no longer contains a hard obligation and it pre-certifies the U.S. as being in compliance. Unions also expressed disappointment with the lack of a provision targeting “right to work” states in the U.S., as well as the lack of a requirement to ratify all fundamental International Labour Organization Conventions. Following the modifications to CUSMA in December 2019, ESDC-Labour held a conference call with labour stakeholders to explain, in detail, the updates to the labour chapter and implications of the bilateral enforcement mechanism with Mexico. Stakeholders were generally supportive, and raised no specific concerns.

31. Academics, civil society and women

Key messages

• Throughout the CUSMA negotiations, the Government has engaged proactively with a variety of stakeholders and partners, including provinces and territories, businesses and business associations, labour organizations, women, youth, Indigenous peoples, civil society organizations, and academics. The views gathered through this process informed Canada’s positions in the negotiations.
• From February 2017 to December 2019, the Government engaged with over 60 non-business stakeholders, including from traditionally less represented groups, through nearly 50 in-person interactions on NAFTA modernization.

Quotations

Civil society stakeholders have had mixed views on the final outcomes:

“Thanks to people power, we have pushed for a better deal. However, it is still a deal based on a flawed pro-multinational blueprint. The deal empowers corporations and is ineffective at challenging the essential issues of our time—climate change and rampant inequality—which are amplified by unregulated globalization.”
– Maude Barlow, Honorary Chairperson of the Council of Canadians (December 10, 2019)

Academics and key public figures are cautiously supportive of the outcomes for Canada:

“The fact this agreement got completed and the fact that it looks extremely similar to the past agreement, and, if anything, the Democrat qualms had to do with strengthening some of the provisions that the Canadian government advocated for in the first place, all of that suggests that our government, working with the difficult U.S. administration was able to achieve a significant policy outcome.”
– Christopher Cochrane, Professor of political science at the University of Toronto (December 11, 2019)

“[A]ll of the provisions, in my view, are an improvement to the old NAFTA, as far as Canada is concerned.”
– David MacNaughton, former Canadian ambassador to the U.S. (December 10, 2019)

“I think Canada should be especially pleased with [the new agreement]. This is a really good deal for Canada, especially knowing that [with] your number one trading partner, the U.S., where 75 per cent of your exports go, you now have an updated, modernized agreement . . . Every so often you’re able to come out with what I call ‘win-win-win’ solutions, and this is it. We’re here.”
– Bruce Heyman, former United States ambassador to Canada (December 10, 2019)

“This agreement is a highly significant achievement for Canada, while benefiting all three countries as it should. I have not yet had the opportunity to study the full text — and frequently the devil is in the details — but Canada appears to have achieved most if not all of its important objectives in this lengthy and challenging set of negotiations.”
– Brian Mulroney, former prime minister of Canada (October 1, 2018)

Think tanks have had mixed views, with some being less supportive of the new NAFTA:

“The Canada-United States-Mexico Agreement (CUSMA) is the new high-water mark in international intellectual property (IP) law.”
– Jeremy de Beer, senior fellow at the Centre for International Governance Innovation. (January 6, 2020)

“[H]undreds of thousands of jobs in Canada depend on it, and from this point of view, saving the agreement is a good thing”
– Michel Kelly-Gagnon, President and CEO of the Montreal Economic Institute (October 1, 2018)

“The negative elements of CUSMA outweigh the positives and will result in lower real GDP and welfare for all three parties, though it leaves all three marginally better off than under a scenario in which NAFTA lapsed. Under CUSMA, Mexico is hardest hit and the United States the least.”
– C.D. Howe Institute (July 25, 2019)

“The [CUSMA] contains positive language with respect to women’s labour rights, but falls short on enforcement.”
– Canadian Centre for Policy Alternatives (June 2019)

Background

The Government of Canada initiated broad public engagement with Canadians to solicit views on the modernization of the North American Free Trade Agreement (NAFTA) in February 2017. The Government proactively developed a stakeholder engagement plan and reached out to key stakeholder groups, including in the areas of civil society, infrastructure and government procurement, services, agriculture and agri-food, automotive, automotive parts, labour, metals, energy, transportation services, and culture as well as Indigenous peoples. In addition, the Government of Canada has used broad-based mechanisms, including soliciting formal written submissions on NAFTA modernization through a Canada Gazette process, as well as a dedicated online NAFTA website.

Between February 2017 and December 2019, the Government of Canada engaged directly with over 60 non-business stakeholders, including from traditionally less represented groups (i.e. civil society, women, youth, academia, and think tanks), through nearly 50 in-person interactions to hear their views on the modernization of NAFTA, and to provide updates on the negotiations and next steps.

Stakeholders engaged included (illustrative list)

• Council of Canadians
• International Institute for Sustainable Development (IISD)
• Canadian Centre for Policy Alternatives
• Consumers Council of Canada
• OpenMedia
• Grandmothers Advocacy Network
• Canadian Environmental Law Association (CELA)
• C.D. Howe Institute
• Women Business Entreprises (WBE) Canada
• Organization of Women in International Trade (OWIT)
• Centre for International Governance Innovation (CIGI)
• Intellectual Property Institute of Canada (IPIC)

What we heard

Non-business groups’ views have been mixed. While some considered the outcomes on dairy and the lack of a more robust outcome on climate change to be major setbacks for Canada, others noted that provisions on labour, environment, and the removal of ISDS were significant improvements over the original Agreement.

E. Provincial and territorial fact sheets

32. British Columbia

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for British Columbia businesses and workers.
• For British Columbia, this means continued market access security for over $21.7 billion in exports to the U.S. and stability for workers that rely on well-paying export dependent jobs, including in the lumber, oil, processed food sectors.
• Maintaining the special dispute resolution procedures to address unfair anti-dumping and countervailing duties (Chapter 19 of the NAFTA) helps ensure that Canada’s market access into the U.S. is protected. This is particularly important for British Columbia’s softwood lumber industry which exported $4.3 billion to the U.S. in 2017.
• In the agriculture sector, this Agreement is great news for farmers in British Columbia who exported over $2.1 billion in agriculture products to the U.S. market and over $7.3 million to Mexico annually.
• For supply managed sectors, the Agreement provides for incremental market access for the U.S. into Canada, but importantly maintains the three pillars of the supply management system – production controls, price controls, and import controls. The Government has promised producers and processors that they will be fully and fairly compensated for all loss of market share.

Imports/Exports to the U.S. and Mexico¹²

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For British Columbia, this means that key exports to the U.S. will continue to receive duty-free treatment compared to the “most-favoured nation rate” charged on imports that are not from U.S. free trade agreement partners, for example:
  • $ 443.0 million in crude petroleum oil (most-favoured nation rate of up to 10.5¢/barrel);
  • $ 388.2 million in refined petroleum oil (most-favoured nation rate of up to 7%);
  • $ 250.9 million in processed food (most-favoured nation rate of up to 10%);
  • $ 121.9 million in lamps and lighting fittings (most-favoured nation rate of up to 12%); and,
  • $ 45.2 million in cocoa preparations (most-favoured nation rate of up to 6%).
• The rules of origin, which determine whether or not a good benefits from the tariff preference, have been modernized and simplified where possible to help reinforce integrated North American supply chains.
• Canada’s exports of agricultural goods will continue to benefit from duty-free access for nearly 89% of U.S. agriculture tariff lines and 91% of Mexican tariff lines. This Agreement is great news for the thousands of farmers in British Columbia who together export over $2.1 billion to the U.S. and over $7.3 million to the Mexican market. Additionally, new market access opportunities will be available to British Columbia exporters in the area of refined sugar and sugar-containing products.
• Maintaining the special dispute resolution procedures to address unfair anti-dumping and countervailing duties (Chapter 19 of the NAFTA) helps ensure that Canada’s market access into the U.S. is protected. This is particularly important for British Columbia’s softwood lumber industry, which exported $4.2 billion to the U.S. annually.

Other benefits for British Columbia

• Outcomes on agricultural biotechnology provide for enhanced regulatory transparency and predictability for products developed using current and future biotechnologies.
• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world. This is particularly important for British Columbia’s aerospace and healthcare products manufacturing sectors.
• Modernizes disciplines to address digital era by ensuring that companies can continue to do business across borders electronically while at the same time preserving the government’s ability to regulate and protect the personal information of Canadians. This will be important for British Columbia’s vibrant video game and digital media sectors.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples. This is particularly important for the 206,000 SMEs in British Columbia.

33. Alberta

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for Alberta businesses and workers.
• For Alberta, this means continued market access security for $ 87.6 billion in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in the oil, beef, wheat and other agricultural sectors.
• In agriculture, this Agreement is great news for the thousands of farmers in Alberta who together export approximately $4.1 billion to the U.S. market annually and over $565 million to Mexico.
• In the oil sector, the CUSMA will resolve a technical issue related to diluent used in Alberta’s crude oil exports to the U.S. that had previously added upwards of $60 million a year in duties and other fees, which served as an unnecessary cost to Alberta businesses.

Imports/Exports to the U.S. and Mexico¹³

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For Alberta, this means that key exports to the U.S. will continue to receive duty-free treatment compared to the “most-favoured nation rate” charged on imports that are not from U.S. free trade agreement partners, for example:
  • $58.4 billion in crude petroleum oil (most-favoured nation rate of up to 10.5¢/barrel);
  • $3.7 billion in polyethylene (most-favoured nation rate of up to 6.5%);
  • $1.2 billion in refined petroleum oil (most-favoured nation rate of up to 7%);
  • $1.2 billion in beef (most-favoured nation rate of up to 26.4%); and,
  • $237.6 million in wheat, oats and barley (most-favoured nation rate of 0.65¢/kg).
• Maintaining duty-free access for beef and cattle provides Alberta’s beef industry with the continued ability to integrate supply chains, keeping the industry competitive by improving economies of scale.
• The rules of origin, which determine whether or not a good benefits from the tariff preference, have been modernized and simplified where possible to help reinforce integrated North American supply chains. For Alberta, for example, the CUSMA will include updated rules of origin for chemicals that reflect industry practices and that will make it easier to demonstrate that these goods comply with the rules of origin.
• Resolves a technical issue related to diluent and Canadian crude oil exports to the U.S. that had previously added upwards of $60 million a year in duties and other fees which served as an unnecessary cost to Canadian businesses.
• Canada’s exports of agricultural goods will continue to benefit from duty-free access for nearly 89% of U.S. agriculture tariff lines and 91% of Mexican tariff lines. This Agreement is great news for the thousands of farmers in Alberta who together export approximately $4.1 billion to the U.S. market and over $565 million to Mexico each year. Additionally, new market access opportunities will be available to Alberta exporters in the area of refined sugar and sugar-containing products.
• For supply managed sectors, the Agreement provides for incremental market access for the U.S. into Canada, but importantly maintains the three pillars of the supply management system – production controls, price controls, and import controls. The Government has promised producers and processors that they will be fully and fairly compensated for all loss of market share.

Other benefits for Alberta

• Outcomes on agricultural biotechnology provide for enhanced regulatory transparency and predictability for products developed using current and future biotechnologies. This is particularly important for Alberta since this outcome not only reinforces an environment that enables trade and innovation in North America, but establishes a basis for strengthened cooperation and international advocacy on a wide range of agricultural biotechnology issues.
• The chapter on sanitary and phytosanitary measures builds on the original agreement and the World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures. It maintains the Parties’ ability to take the measures necessary to protect human, animal and plant life or health, while requiring that such measures be science-based, transparent and not applied in a manner that creates unnecessary barriers to trade. The chapter also creates a new mechanism to resolve disputes cooperatively by government officials, before resorting to the dispute settlement mechanism of the Agreement.
• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future free trade agreement.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world. This is particularly important for Alberta companies providing services in the energy sector.
• Modernizes disciplines to address digital era by ensuring that companies can continue to do business across borders electronically while at the same time preserving the government’s ability to regulate and protect the personal information of Canadians. This is particularly important for the vibrant digital media industry in Alberta.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples. This is particularly important for Alberta, considering that small businesses generated 32% of Alberta’s GDP in 2014 – the second highest of all provinces and above the Canadian average of 30%.

34. Saskatchewan

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for Saskatchewan businesses and workers.
• For Saskatchewan, this means continued market access security for over $15.5 billion in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in the canola oil, other agricultural sectors and the oil industries.
• In the agriculture sector, this Agreement is great news for the thousands of farmers in Saskatchewan, who together export over $3.6 billion to the U.S. market and nearly $700 million to Mexico.

Imports/Exports to the U.S. and Mexico¹⁴

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For Saskatchewan, this means that key exports to the U.S. will continue to receive duty-free treatment compared to the “most-favoured nation rate” charged on imports that are not from U.S. free trade agreement partners, for example:
  • $5.9 billion in crude petroleum oil (most-favoured nation rate of up to 10.5¢/barrel);
  • $1.2 billion in canola oil (most-favoured nation rate of up to 6.4%);
  • $78.3 million in refined petroleum oil (most-favoured nation rates of up to 7%);
  • $63.7 million in certain animal or vegetable fats and oils (most-favoured nation rate of up to 18%); and,
  • $45.7 million in groats and meal of cereal (most favoured nation rate of 9%).
• Canada’s exports of agricultural goods will continue to benefit from duty-free access for nearly 89% of U.S. agriculture tariff lines and 91% of Mexican tariff lines. This Agreement is great news for the thousands of farmers in Saskatchewan, who together export over $3.6 billion to the U.S. market and nearly $700 million to Mexico.

Other benefits for Saskatchewan

• The rules of origin, which determine whether or not a good benefits from the tariff preference, have been modernized and simplified where possible to help reinforce integrated North American supply chains.
• Outcomes on agricultural biotechnology provide for enhanced regulatory transparency and predictability for products developed using current and future biotechnologies. This is particularly important for Saskatchewan since this outcome not only reinforces an environment that enables trade and innovation in North America, but establishes a basis for strengthened cooperation and international advocacy on a wide range of agricultural biotechnology issues.
• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• The chapter on sanitary and phytosanitary measures builds on the original agreement and the World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures. It maintains the Parties’ ability to take the measures necessary to protect human, animal and plant life or health, while requiring that such measures be science-based, transparent and not applied in a manner that creates unnecessary barriers to trade. The chapter also creates a new mechanism to resolve disputes cooperatively by government officials, before resorting to the dispute settlement mechanism of the Agreement.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples. Notably, in Saskatchewan nearly all businesses are SMEs.

35. Manitoba

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for Manitoba businesses and workers.
• For Manitoba, this means continued market access security for nearly $9.6 billion in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in the canola oil, heavy vehicles (buses and bus parts), and frozen French fry industries.
• In the agriculture sector, this agreement is great news for the thousands of farmers in Manitoba who together export over $2.6 billion to the U.S. and over $354 million to the Mexico market annually.

Imports/Exports to the U.S. and Mexico¹⁵

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For Manitoba, this means that key exports to the U.S. will continue to receive duty-free treatment compared to the “most-favoured nation rate” charged on imports that are not from U.S. free trade agreement partners, for example:
  • $ 523.4 million in canola oil (most-favoured nation rate of 6.4%);
  • $ 436.5 million in buses (most-favoured nation rate of 2%);
  • $ 386.2 million in frozen French fries (most-favoured nation rate of up to 8%);
  • $ 227.0 million in bus parts (most-favoured nation rate of up to 4%); and,
  • $ 192.0 million in crude petroleum oil (most-favoured nation rate of up to 10.5¢/barrel).
• The rules of origin, which determine whether or not a good benefits from the tariff preference, have been modernized and simplified where possible to help reinforce integrated North American supply chains.
• Canada’s exports of agricultural goods will continue to benefit from duty-free access for nearly 89% of U.S. agriculture tariff lines and 91% of Mexican tariff lines. This Agreement is great news for the thousands of farmers in Manitoba who together export over $2.6 billion to the U.S. and over $354 million to the Mexico markets. New market access opportunities will be available to Manitoba exporters in the areas of refined sugar and sugar-containing products.

Other benefits for Manitoba

• Outcomes on agricultural biotechnology provide for enhanced regulatory transparency and predictability for products developed using current and future biotechnologies. Outcomes will provide greater predictability for exporters by helping to address unsynchronized product approvals and resulting trade issues related to them. The text not only reinforces an environment that enables trade and innovation in North America, but establishes a basis for strengthened cooperation and international advocacy on a wide range of agricultural biotechnology issues. This is particularly important for Manitoba since this outcome not only reinforces an environment that enables trade and innovation in North America, but establishes a basis for strengthened cooperation and international advocacy on a wide range of agricultural biotechnology issues.
• The chapter on sanitary and phytosanitary measures builds on the original agreement and the World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures. It maintains the Parties’ ability to take the measures necessary to protect human, animal and plant life or health, while requiring that such measures be science-based, transparent and not applied in a manner that creates unnecessary barriers to trade. The chapter also creates a new mechanism to resolve disputes cooperatively by government officials, before resorting to the dispute settlement mechanism of the Agreement.
• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world. This is particularly important for Manitoba’s aerospace industry.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples. This is particularly important for Manitoba, where 91.5% of employment was in SMEs in 2017.

36. Ontario

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for Ontario businesses and workers.
• For Ontario, this means continued market access security for $182.7 billion in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in the auto sector, as well as auto parts, plastics, tires and processed food industries.
• The strengthened CUSMA rules of origin for automobiles and auto parts will create opportunities for Canadian parts producers in Ontario to increase sales to North American automakers.
• In the agriculture sector, this Agreement is great news for the thousands of farmers in Ontario, who together export $12.3 billion to the U.S. and over $136 million to the Mexican market.
• For supply managed sectors, the Agreement provides for incremental market access for the U.S. into Canada, but importantly maintains the three pillars of the supply management system – production controls, price controls, and import controls. The Government has promised producers and processors that they will be fully and fairly compensated for all loss of market share.

Imports/Exports to the U.S. and Mexico¹⁶

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For Ontario, this means that key exports to the U.S. will continue to receive duty-free treatment compared to the “most-favoured nation rate” charged on imports that are not from U.S. free trade agreement partners, for example:
  • $ 57.2 billion in light vehicles (most-favoured nation rate of up to 2.5% for cars and 25% for pick-up trucks);
  • $ 16.8 billion in vehicle parts (most-favoured nation rate of up to 5.7%);
  • $ 7.3 billion in plastics (most favoured nation rate of up to 6.5%);
  • $1.2 billion in refined petroleum oil (most favoured nation rate of up to 7%); and
  • $645.5 million in tires (most-favoured nation rate of up to 4%).
• The rules of origin, which determine whether or not a good benefits from the tariff preference, have been modernized and simplified where possible to help reinforce integrated North American supply chains.
• The strengthened CUSMA rules of origin for automobiles and auto parts will create opportunities for Canadian parts producers, most of which are located in Ontario, to increase sales to North American automakers.
  • A special automotive requirement relating to minimum labour wages could provide Ontario’s assembly and parts facilities with a competitive advantage over lower cost jurisdictions in the U.S. and Mexico, helping to keep these facilities and well-paying jobs in the province.
  • Should the U.S. impose Section 232 measures be applied on autos, Canada has secured an annual exemption for up to 2.6 million automobiles and up to US$32.4 billion worth of auto parts imported into the United States from Canada. Light trucks imported from Canada will be fully exempt from any Section 232 duties.
  • These levels are higher than recent Canadian exports of automobiles and parts to the United States, thereby allowing for future growth in Canadian exports.
  • Under normal terms of trade (i.e., no Section 232 measures in place), all automotive trade between Canada and the United States will continue to benefit from duty-free and quota free access.
• Ontario companies may also benefit from updated rules of origin for chemicals that reflect industry practices and that will make it easier to demonstrate that these goods comply with the rules of origin.
• Canada’s exports of agricultural goods will continue to benefit from duty-free access for nearly 89% of U.S. agriculture tariff lines and 91% of Mexican tariff lines. This Agreement is great news for the thousands of farmers in Ontario, who together export $12.3 billion to the U.S. and over $136 million to the Mexican market. Additionally, new market access opportunities will be available to Ontario exporters in the areas of refined sugar and sugar-containing products and margarine.
• For supply-managed sectors, the Agreement provides for incremental market access for the U.S. into Canada, but importantly maintains the three pillars of the supply management system – production controls, price controls, and import controls.

Other benefits for Ontario

• Outcomes on agricultural biotechnology provide for enhanced regulatory transparency and predictability for products developed using current and future biotechnologies.
• The chapter on sanitary and phytosanitary measures builds on the original agreement and the World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures. It maintains the Parties’ ability to take the measures necessary to protect human, animal and plant life or health, while requiring that such measures be science-based, transparent and not applied in a manner that creates unnecessary barriers to trade. The chapter also creates a new mechanism to resolve disputes cooperatively by government officials, before resorting to the dispute settlement mechanism of the Agreement.
• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world. This is particularly important for Ontario’s emerging advanced manufacturing sectors, such as robotics, where the ability to have engineers and other experts easily move within North America to deliver services is critical.
• Modernizes disciplines to address digital era by ensuring that companies can continue to do business across borders electronically while at the same time preserving the government’s ability to regulate and protect the personal information of Canadians. This is particularly important for the 165,400 people employed in the information technology, culture and recreation industries¹⁷ in Toronto, as well as the province’s position as a growing leader in advanced manufacturing, such as robotics.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples.

37. Quebec

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for Quebec businesses and workers.
• For Quebec, the CUSMA means continued market access security for $60.8 billion in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in the aerospace, heavy truck, agricultural, and apparel industries.
• The CUSMA includes strengthened rules of origin provisions, requiring that 70% of aluminium purchased by automakers in the production of automobiles originate in North America. For supply-managed sectors, the Agreement provides for incremental market access for the U.S. into Canada, but importantly maintains the three pillars of the supply management system – production controls, price controls, and import controls. The Government has promised producers and processors that they will be fully and fairly compensated for all loss of market share.
• The general exception for information and cultural industries preserves Canada’s ability to adopt and maintain programs and policies that support Canada’s thriving cultural industries, which represent 73,221 jobs in Quebec, and 339,668 jobs across the country that contribute $62.8 billion to the Canadian economy¹⁸.
• Canada also maintained the special dispute resolution procedures for unfair anti-dumping and countervailing duties, Chapter 19 of the original NAFTA, which is particularly important for Quebec`s softwood lumber industry, which exported $1.4 billion to the U.S. annually.

Imports/Exports to the U.S. and Mexico¹⁹

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For Quebec, this means that key exports to the U.S. will continue to receive duty-free treatment compared to the “most-favoured nation rate” charged on imports that are not from U.S. free trade agreement partners, for example:
  • $ 1.5 billion in trucks (most-favoured nation rate of up to 25%);
  • $ 411.6 million in tires (most-favoured nation rate of up to 4%);
  • $ 355.6 million in apparel (most-favoured nation rate of up to 32%);
  • $ 281.5 million in certain processed foods (most-favoured nation rate up to 10%); and,
  • $ 54.5 million in footwear (most-favoured nation rate of up to 48%).
• The rules of origin, which determine whether or not a good benefits from the tariff preference, have been modernized, strengthened and simplified where possible to help reinforce integrated North American supply chains. For example the new provisions requiring that 70% of the aluminium purchased by automakers in the production of automobiles originate in North America will benefit Quebec’s aluminium sector, which already supplies significant amounts to the United States and Mexico. It will also mean that apparel exported under Tariff Preference Levels (TPLs), will no longer be subject to the U.S. merchandise processing fee.
• Canada’s exports of agricultural goods will continue to benefit from duty-free access for nearly 89% of U.S. agriculture tariff lines and 91% of Mexican tariff lines. This Agreement is great news for the thousands of farmers and food processors in Quebec, who together export $5.7 billion agriculture products to the U.S. market and over $95.2 million to Mexico. Additionally, new market access opportunities will be available to Quebec exporters in the areas of refined sugar and sugar-containing products, margarine and whey powder.
• For supply-managed sectors, the Agreement provides for incremental market access for the U.S. into Canada, but importantly maintains the three pillars of the supply management system – production controls, price controls, and import controls.
• Maintaining the special dispute resolution procedures to address unfair anti-dumping and countervailing duties (Chapter 19 of the NAFTA) helps ensure that Canada’s market access into the U.S. is protected. This is particularly important for Quebec’s softwood lumber industry, which exported $1.4 billion to the U.S. annually.
• The general exception for cultural industries preserves Canada’s ability to adopt and maintain programs and policies that support the creation, distribution, and development of Canadian artistic expression or content, including in the digital environment, where the future of cultural industries lies. The thriving cultural industries represent 73,221 jobs in Quebec, from 339,668 jobs across the country that contribute $62.8 billion to the Canadian economy.²⁰

Other benefits for Quebec

• Outcomes on agricultural biotechnology provide for enhanced regulatory transparency and predictability for products developed using current and future biotechnologies.
• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world. This is particularly important for high technology manufacturing, such as the Quebec aerospace sector, where the ability to have engineers and other experts easily move within North America to deliver services is critical.
• Modernizes disciplines to address the digital era by ensuring that companies can continue to do business across borders electronically while at the same time preserving the government’s ability to regulate and protect the personal information of Canadians. This is particularly important for the video games growing industry in the Montreal area, as well as the regions position as a growing leader in new technology innovation, and a top destination for investment in artificial intelligence and life sciences. Montreal’s information and communications technology (ICT) sector supports over 114,400 jobs and the city is becoming a major world hub for ICT.²¹
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples. This is particularly important for Quebec, considering that 99.8% of its enterprises are small or medium-sized enterprises.

38. New Brunswick

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for businesses and workers in New Brunswick.
• For New Brunswick, the CUSMA means continued market access security for over $10.9 billion in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in the petroleum, processed food and agricultural industries.
• This agreement is great news for the farmers and fishers of New Brunswick who export $390.2 million of agricultural products and $1.3 billion of fish and seafood to the United States annually.
• Maintaining the special dispute resolution procedures to address unfair anti-dumping and countervailing duties (Chapter 19 of the NAFTA) helps ensure that Canada’s market access into the U.S. is protected. This is particularly important for New Brunswick’s softwood lumber industry, which exports $506 million to the U.S. annually.

Imports/Exports to the U.S. and Mexico²²

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For New Brunswick, this means that key exports to the U.S. will continue to receive duty-free treatment compared to the “most-favoured nation rate” charged on imports that are not from U.S. free trade agreement partners, for example:
  • $ 6.1 billion in refined petroleum oil (most-favoured nation rate of up to 7%);
  • $ 151.4 million in frozen French fries (most-favoured nation rate of up to 8%); and,
  • $ 25.8 million in nuts and seeds, other than peanuts, (most-favoured nation rate of up to 20.4%).
• Canada’s exports of agricultural goods will continue to benefit from duty-free access for nearly 89% of U.S. agriculture tariff lines and 91% of Mexican tariff lines. This Agreement is great news for the thousands of farmers in New Brunswick who together export over $390.2 million to the U.S. and over $7.6 million to the Mexican market each year.
• For supply managed sectors, the Agreement provides for incremental market access for the U.S. into Canada, but importantly maintains the three pillars of the supply management system – production controls, price controls, and import controls. The Government has promised producers and processors that they will be fully and fairly compensated for all loss of market share.
• Maintaining the special dispute resolution procedures to address unfair anti-dumping and countervailing duties (Chapter 19 of the NAFTA) helps ensure that Canada’s market access into the U.S. is protected. This is particularly important for New Brunswick’s softwood lumber industry, which exported $506 million to the U.S. annually.

Other benefits for New Brunswick

• The rules of origin, which determine whether or not a good benefits from the tariff preference, have been modernized and simplified where possible to help reinforce integrated North American supply chains.
• Outcomes on agricultural biotechnology provide for enhanced regulatory transparency and predictability for products developed using current and future biotechnologies.
• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples. This is particularly important for New Brunswick, where roughly 92% of employment was in SMEs in 2017.

39. Nova Scotia

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for businesses and workers in Nova Scotia.
• For Nova Scotia, the CUSMA means continued market access security for over $3.5 billion in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in the tire, plastics, and fish and seafood industries.
• In particular, this Agreement is great news for the farmers and fishers of Nova Scotia who export $181.4 million of agricultural products and $990.6 million of fish and seafood to the United States.
• For supply managed sectors, the Agreement provides for incremental market access for the U.S. into Canada, but importantly maintains the three pillars of the supply management system – production controls, price controls, and import controls. The Government has promised producers and processors that they will be fully and fairly compensated for all loss of market share.

Imports/Exports to the U.S. and Mexico²³

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For Nova Scotia, this means that key exports to the U.S. will continue to receive duty-free treatment compared to the “most-favoured nation rate” charged on imports that are not from U.S. free trade agreement partners, for example:
  • $ 1.0 billion in tires (most-favoured nation rate of up to 4%);
  • $ 165.3 million in plastics (most-favoured nation rate of up to 6.5%);
  • $ 86.4 million in textiles (most-favoured nation rate of up to 12%); and
  • $ 40.4 million in certain prepared/preserved fish (most-favoured nation rate of up to 10%).
• The rules of origin, which determine whether or not a good benefits from the tariff preference, have been modernized and simplified where possible to help reinforce integrated North American supply chains. For example, the new Agreement will mean that apparel exported to the U.S. from Nova Scotia under Tariff Preference Levels (TPLs), will no longer be subject to the U.S. Merchandise Processing Fee.
• Canada’s exports of agricultural goods will continue to benefit from duty-free access for nearly 89% of U.S. agriculture tariff lines and 91% of Mexican tariff lines.
• Maintaining the special dispute resolution procedures to address unfair anti-dumping and countervailing duties (Chapter 19 of the NAFTA) helps ensure that Canada’s market access into the U.S. is protected. This is particularly important for Nova Scotia’s pulp and paper industry, which exported $178.7 million to the U.S. as an annual average from 2016-2018.
• This Agreement is great news for the farmers and fishers of Nova Scotia who export $181.4 million of agricultural products to the U.S. and nearly $1.2 million to Mexico, as well as $990.6 million of fish and seafood to the United States.

Other benefits for Nova Scotia

• Outcomes on agricultural biotechnology provide for enhanced regulatory transparency and predictability for products developed using current and future biotechnologies.
• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world.
• Modernizes disciplines to address digital era by ensuring that companies can continue to do business across borders electronically while at the same time preserving the government’s ability to regulate and protect the personal information of Canadians.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples. This is particularly important for Nova Scotia’s roughly 30,000 small businesses.

40. Prince Edward Island

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for businesses and workers in Prince Edward Island.
• For Prince Edward Island, the CUSMA means continued market access security for almost $950 million in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in the agriculture, processed food and industrial machinery industries.
• This Agreement is great news for the farmers and fishers of Prince Edward Island who export $385.5 million of agricultural products and $225.7 million of fish and seafood to the United States annually.

Imports/Exports to the U.S. and Mexico²⁴

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For Prince Edward Island, this means that key exports to the U.S. will continue to receive duty-free treatment compared to the “most-favoured nation rate” charged on imports that are not from U.S. free trade agreement partners, for example:
  • $ 267 million in frozen French fries (most-favoured nation tariffs of up to 8%);
  • $ 26.9 million in industrial machinery, such as brewery machinery, and taps cocks and valves (most-favoured nation tariffs of up to 9%); and,
  • $ 10.7 million in processed potatoes (most-favoured nation tariffs of 6.4%).
• Canada’s exports of agricultural goods will continue to benefit from duty-free access for nearly 89% of U.S. agriculture tariff lines and 91% of Mexican tariff lines.
• This Agreement is great news for the farmers and fishers of Prince Edward Island who export $385.5 million of agricultural products and $225.7 million of fish and seafood to the United States each year.
• For supply managed sectors, the Agreement provides for incremental market access for the U.S. into Canada, but importantly maintains the three pillars of the supply management system – production controls, price controls, and import controls. The Government has promised producers and processors that they will be fully and fairly compensated for all loss of market share.
• The rules of origin, which determine whether or not a good benefits from the tariff preference, have been modernized and simplified where possible to help reinforce integrated North American supply chains.

Other benefits for Prince Edward Island

• Outcomes on agricultural biotechnology provide for enhanced regulatory transparency and predictability for products developed using current and future biotechnologies.
• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples.

41. Newfoundland and Labrador

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for businesses and workers in Newfoundland and Labrador.
• For Newfoundland and Labrador, the CUSMA means continued market access security for over $5.5 billion in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in oil, fish and seafood industries.
• This Agreement is great news for the farmers and fishers of Newfoundland and Labrador who export $8.6 million of agricultural products and $462.3 million of fish and seafood to the United States annually.

Imports/Exports to the U.S. and Mexico²⁵

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For Newfoundland and Labrador, this means that key exports to the U.S. will continue to receive duty-free treatment compared to the “most-favoured nation rate” charged on imports that are not from U.S. free trade agreement partners, for example:
  • $ 2.9 billion in crude petroleum oil (most-favoured nation rate of up to 10.5¢/barrel);
  • $ 2.0 billion in refined petroleum oil (most-favoured nation rate of up to 7%); and,
  • $12.6 million in prepared or preserved crab (most-favoured nation rate of up to 10%).
• Canada’s exports of agricultural goods will continue to benefit from duty-free access for nearly 89% of U.S. agriculture tariff lines and 91% of Mexican tariff lines.
• This Agreement is great news for the farmers and fishers of Newfoundland and Labrador who export $8.6 million of agricultural products and $462.3 million of fish and seafood to the United States.

Other benefits for Newfoundland and Labrador

• The rules of origin, which determine whether or not a good benefits from the tariff preference, have been modernized and simplified where possible to help reinforce integrated North American supply chains.
• Outcomes on agricultural biotechnology provide for enhanced regulatory transparency and predictability for products developed using current and future biotechnologies.
• The chapter on sanitary and phytosanitary measures builds on the original agreement and the World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures. It maintains the Parties’ ability to take the measures necessary to protect human, animal and plant life or health, while requiring that such measures be science-based, transparent and not applied in a manner that creates unnecessary barriers to trade. The chapter also creates a new mechanism to resolve disputes cooperatively by government officials, before resorting to the dispute settlement mechanism of the Agreement.
• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples. This is particularly important for Newfoundland and Labrador, where SMEs employed 94% of private sector workers in 2017.

42. Yukon

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for Yukon businesses and workers.
• For Yukon, the CUSMA means continued market access security for $133.5 million in annual exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in the oil and extractive industries.

Imports/Exports to the U.S. and Mexico²⁶

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico. For Yukon, this means that key exports to the U.S. will continue to receive duty-free treatment, for example:
  • $349.6 thousand in refined petroleum oil (most-favoured nation rate of up to 7%).

Other benefits for Yukon

• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples.

43. Northwest Territories

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for Northwest Territories businesses and workers.
• For the Northwest Territories, the CUSMA means continued market access security for over $3.5 million in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs, including in the extractive, industrial machinery and aluminum industries.

Imports/Exports to the U.S. and Mexico²⁷

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico.

Other benefits for Northwest Territories

• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Temporary entry market access commitments have been carried forward from the original NAFTA, under which Canadians have unique preferential access to the U.S. to deliver services, provide after sales support, and see their investments first hand; better access than any other country in the world.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples.

44. Nunavut

Key messages

• The Canada-United States-Mexico Agreement (CUSMA) reinforces our important commercial relationship with our North American partners and provides important stability and predictability for Nunavut businesses and workers.
• For Nunavut, the CUSMA means continued market access security for $714,000 in exports to the U.S. and Mexico and stability for workers that rely on well-paying export dependent jobs.

Imports/Exports to the U.S. and Mexico²⁸

Key benefits

• Duty-free access for all non-agricultural goods from NAFTA is maintained under CUSMA, providing Canadians with an advantage over those countries without a preferential trade agreement with the U.S. and Mexico.

Other benefits for Nunavut

• Commitments on trade facilitation and customs procedures have been modernized for the 21^st century to better facilitate cross-border trade, including through the use of electronic processes which will reduce red tape for exporters and save them money.
• Includes new and modernized disciplines on technical barriers to trade in key sectors that are designed to minimize obstacles for Canadians doing business in the U.S. and Mexico while preserving Canada’s ability to regulate in the public interest.
• Preserves stability and predictability of market access into the U.S. and Mexico for Canadian investors and service suppliers, and ensures that Canada benefits from future liberalization made by either country in the context of a future FTA.
• Includes a new chapter on small and medium-sized enterprises (SMEs) designed to foster cooperation to increase trade and investment opportunities while also ensuring that information is available to SMEs on the obligations and functioning of the Agreement. The chapter also encourages Parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, including women and Indigenous peoples.

F. Reference material

45. Country factsheets

United States

1. The U.S. had an overall trade surplus in goods and services with Canada in 2018 (Source: U.S. Bureau of Economic Analysis)

• Total U.S.-Canada trade in goods and services was US$721.2B in 2018
• U.S. exports of goods and services to Canada in 2018 were US$361.2B
• U.S. imports of goods and services from Canada in 2018 were US$360.0B
• U.S. trade surplus in goods and services with Canada in 2018 was US$1.2B

2. The U.S. had an overall trade surplus in services with Canada in 2018 (Source: U.S. Bureau of Economic Analysis)

• Total U.S.-Canada trade in services was US$96.9B in 2018
• U.S. exports of services to Canada in 2018 were US$61.8B
• U.S. imports of services from Canada in 2018 were US$35.1B
• U.S. trade surplus in services with Canada in 2018 was US$26.7B

3. The U.S. had an overall trade deficit in goods with Canada in 2018 (Source: U.S. Bureau of Economic Analysis)

• Total U.S.-Canada trade in goods was US$624.2B in 2018
• U.S. exports of goods to Canada in 2018 were US$299.4B
• U.S. imports of goods from Canada in 2018 were US$324.9B
• U.S. trade deficit in goods with Canada in 2018 was US$25.5B

4. The U.S. had an overall trade surplus with Canada on goods and services plus direct investment income in 2018 (Source: U.S. Bureau of Economic Analysis)

• Total U.S.-Canada trade in goods and services plus direct investment income was US$776.9B in 2018
• U.S. exports of goods and services to Canada plus direct investment receipts from Canada in 2018 were US$391.7B
• U.S. imports of goods and services from Canada plus direct investment payments to Canada in 2018 were US$385.2B
• U.S. trade surplus in goods and services plus direct investment income with Canada in 2018 was US$6.5B

5. The U.S. had a merchandise trade deficit with Canada in energy products in 2018 (Source: U.S. Census Bureau)

• Total U.S.-Canada trade in energy was US$110.0B in 2018
• U.S. exports of energy to Canada in 2018 were US$25.8B
• U.S. imports of energy from Canada in 2018 were US$84.2B
• U.S. trade deficit in energy with Canada in 2018 was US$58.3B

6. With energy trade removed, the U.S. had a merchandise trade surplus with Canada in 2018 (Source: U.S. Census Bureau)

• Total U.S.-Canada non-energy merchandise trade was US$507.2B in 2018
• U.S. exports (without energy) to Canada in 2018 were US$272.9B
• U.S. imports (without energy) from Canada in 2018 were US$234.3B
• U.S. trade surplus (without energy) with Canada in 2018 was US$38.6B

7. For manufactured goods (without energy, mining and agriculture commodities), the U.S. had a trade surplus with Canada in 2018 (Source: U.S. Census Bureau)

• Total U.S.-Canada manufacturing trade was US$476.1B in 2018
• U.S. manufacturing exports to Canada in 2018 were US$260.9B
• U.S. manufacturing imports from Canada in 2018 were US$215.2B
• U.S. manufactured goods surplus with Canada in 2018 was US$45.7B

8. Top U.S. Merchandise Exports to Canada and Imports from Canada in 2018 (Source: U.S. Census Bureau)

9. Top U.S. Export Destinations for Goods and Services in 2018 (Source: U.S. Bureau of Economic Analysis)

10. The U.S. had an overall merchandise surplus in iron & steel and their articles with Canada in 2018 (Source: U.S. Census Bureau)

Nearly 31% of U.S. iron and steel (HS 72+73) exports go to Canada:

• Total U.S.-Canada trade in iron & steel and their articles (HS 72+73) was US$21.1B in 2018
• U.S. exports of iron & steel and their article sto Canada in 2018 were US$10.9B
• U.S. imports of iron & steel and their articles from Canada in 2018 were US$10.2B
• U.S. trade surplus in iron & steel and their articles with Canada in 2018 was US$741M

11. The U.S. had a merchandise trade deficit with Canada in Section 232 steel articles²⁹ in 2018 (Source: U.S. Census Bureau)

• Total U.S.-Canada trade in S232 steel articles was US$10.9B in 2018
• U.S. exports of S232 steel articles to Canada in 2018 were US$5.3B
• U.S. imports of S232 steel articles from Canada in 2018 were US$5.6B
• U.S. trade deficit in S232 steel articles with Canada in 2018 was US$0.3B

12. The U.S. had a merchandise trade deficit with Canada in aluminum in 2018 (Source: U.S. Census Bureau)

• Total U.S.-Canada trade in aluminum (HS 76) was US$11.4B in 2018
• U.S. exports of aluminum (HS 76) to Canada in 2018 were US$3.2B
• U.S. imports of aluminum (HS 76) from Canada in 2018 were US$8.2B
• U.S. trade deficit in aluminum (HS 76) with Canada in 2018 was US$4.9B

13. The U.S. had a merchandise trade deficit with Canada in Section 232 aluminum articles³⁰ in 2018 (Source: U.S. Census Bureau)

• Total U.S.-Canada trade in S232 aluminum articles was US$9.0B in 2018
• U.S. exports of S232 aluminum articles to Canada in 2018 were US$2.2B
• U.S. imports of S232 aluminum articles from Canada in 2018 were US$6.7B
• U.S. trade deficit in S232 aluminum articles with Canada in 2018 was US$4.5B

14-A. The U.S. had a merchandise trade surplus with Canada in dairy products in 2018 (US$) (Source: U.S. Census Bureau, USDA FAS Dairy Definition)

• Total U.S.-Canada trade in dairy products was US$1.2B in 2018
• U.S. exports of dairy products to Canada in 2018 were US$671M
• U.S. imports of dairy products from Canada in 2018 were US$529M
• U.S. trade surplus in dairy products with Canada in 2018 was US$141M

14-B. Canada had a merchandise trade deficit with the U.S. in dairy products in 2018 (CAD$) (Source: Statistics Canada, AAFC Dairy Definition)

• Total Canada-U.S. trade in dairy products was CAD$561M in 2018
• Canadian exports of dairy products to the United States in 2018 were CAD$154M
• The Canadian imports of dairy products from the United States in 2018 were CAD$406M
• Canadian trade deficit in dairy products with Canada in 2018 was CAD$252M

Mexico

Trade in goods and services (All data from Statistics Canada, U.S. Dollars)

1. Canada had an overall trade deficit in goods and services with Mexico in 2018

• Total Canada-Mexico trade in goods and services was US$26.8B in 2018
• Canadian exports of goods and services to Mexico in 2018 was US$8.4B
• Canadian imports of goods and services from Mexico in 2018 was US$18.3B
• Canada’s trade deficit in goods and services with Mexico in 2018 was US$9.9B

2. Canada had an overall trade deficit in services with Mexico in 2018

• Total Canada-Mexico trade in services was US$3.3B in 2018
• Canadian exports of services to Mexico in 2018 was US$1.1B
• Canadian imports of services from Mexico in 2018 was US$2.2B
• Canada’s trade deficit in services with Mexico in 2018 was US$1.1B

3. Canada had an overall trade deficit in goods with Mexico in 2018

• Total Canada-Mexico trade in goods was US$23.4B in 2018
• Canadian exports of goods to Mexico in 2018 was US$7.3B
• Canadian imports of goods from Mexico in 2018 was US$16.1B
• Canada’s trade deficit in goods with Mexico in 2018 was US$8.7B

4. Canada’s top merchandise exports and imports to Mexico in 2018

5. Canada-Mexico trade in motor vehicles, 2018, US$ Millions

6. Canada-Mexico trade in agricultural & seafood products, 2018, US$ Millions