The US-Canada-Mexico Trade Deal and Your Small Business

Lili Török
Oct 1, 2018 · 3 min read
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In the eleventh hour, the US and Canada reached an agreement to save NAFTA. Or rather, its new incarnation, the United States-Mexico-Canada Agreement (USMCA).

They cut it really close. Maybe a little too close.

After over a year of hard negotiations, with the and its like storm clouds, just a few hours before the deadline, the deal was reached.

Details of USMCA

According to a ,

“USMCA will give our workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region. It will strengthen the middle class and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.”

While , issues with Canada still remained unresolved. The main pain points were access to the Canadian dairy market for US farmers, and the dispute resolving mechanism Canada insisted on keeping.

What It Means for Your Small Business

In general, small businesses on all sides of the borders can breathe a sigh of relief: business as usual will continue. No dropped business contacts, no delayed.

Even if the industry you’re active in wasn’t particularly affected by the trade negotiations, cooling relations with the US’s main trade partners would’ve certainly taken their toll on your business.

G. The new agreement will help pave the way for finding , exporting your products to and , as well as importing supplies from these countries.

Dairy

The new USMCA deal ensures that US farmers have greater access to Canadian dairy, egg, and poultry markets. This will help reduce the pain from chronic overproduction in the US dairy market.

Another victory for US negotiators is the elimination of the Canadian that favored Canadian milk producers and effectively prevented US (and any other imported) diafiltered milk from entering the Canadian market.

Granted, small dairy producers on the Canadian side will surely feel the effects of this change. Currently, we aren’t aware of the pricing possibilities. But, depending on what US producers are charging, Canadian dairy farmers may see a dip in sales and production as a result of the deal.

Automotive

Canada will be allowed to continue exporting vehicles and auto-parts to the US, which amount to around $71 billion annually.

Should the US decide to go forward with , in theory, those would apply to Canada and Mexico as well. However, both countries can have the 20–25% tariffs (around 40% above their current levels).

Dispute Resolving Mechanism

Chapter 19 of the NAFTA agreement dealt with dispute resolutions. Although the US wasn’t particularly fond of the mechanism, Canada insisted on keeping it without significant change.

The section outlines the ways companies can seek arbitration if they feel that the other parties don’t follow the rules set by the USMCA agreement.

What’s Next

USMCA can be enforced once legislative bodies in all three countries have given their assent. In the US, Congress has sixty days to review the text before President Trump can sign it.

The plan is to sign the deal before December 1, when Mexican President Enrique Peña Nieto leaves office.

Small Business, Big World

We believe in the power of small business.

Lili Török

Written by

Writer

Small Business, Big World

We believe in the power of small business. We believe in their initiative as they embrace the digital world and the global. At Veem, we're helping small businesses do what they do best: grow.

Lili Török

Written by

Writer

Small Business, Big World

We believe in the power of small business. We believe in their initiative as they embrace the digital world and the global. At Veem, we're helping small businesses do what they do best: grow.

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