USMCA provides certainty, says CPMA

October 13, 2018
Written by Greenhouse Canada
Earlier this month, a new trilateral free trade agreement was reached between Canada, Mexico and the United States.

Known as the United States-Mexico-Canada Agreement (USMCA), the new agreement has affected Canada's agricultural sectors differently and sparked differing opinions across the country.

“The new agreement provides certainty for greenhouse growers and investors,” says Ron Lemaire, president of the Canadian Produce Marketing Association. “The new USMCA maintains the Chapter 19 dispute settlement mechanism in NAFTA and introduces a robust Sanitary and Phytosanitary Chapter.

Chapter 19 was one of the key sections that Canada wanted to retain. “The chapter allows companies that feel their products have been unfairly hit by anti-dumping or countervailing duties to request arbitration,” reports the CBC.

“Greenhouse growers will also be relieved that all three countries have committed to regulatory cooperation and transparency which will benefit industry by finding efficiencies and alignment,” continues Lemaire. “Furthermore, the new Competitiveness Chapter will aim to make the North American trading block one of the most competitive in the world and one of the most attractive economies in which to invest.”

Chapter 26, the newly added ‘Competitiveness Chapter’, requires the creation of a North American Competitiveness Committee made up of three members – one from each country – with the goal of enhancing the competitiveness of the North American economy.

Other sectors of the agricultural industry are feeling less positive. In a release, president of the Ontario Federation of Agriculture (OFA) Keith Currie notes that there is more market access for American farmers exporting dairy, eggs and poultry into Canada.

He continues, “The continuing tariffs on Canadian steel and aluminum imposed by the U.S. increases our costs of production. The tariff war the U.S. is waging against China has depressed North American markets for meat and grain – again, at the expense and to the detriment of Canadian farmers.”

Dr. Blayne Haggart, associate professor of Political Science at Brock University thinks the true cost of the agreement is still unclear. In his post, Haggart highlights two key changes: a mandatory review of the agreement once every six years and constraints on free-trade negotiations with non-market countries such as China.

“Normal trade agreements also usually just cover trade among its members, not their ability to negotiate with other countries,” Haggart notes. He emphasizes that the new agreement not only gives the US authority over Canada’s domestic and international economic goals, but the review process will likely encourage negotiators to cater to US interests.

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