USMCA: Aftermath (Part I)

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Lucas Galand
News Editor


Anew trade deal has been stuck in North America, replacing the North American Free Trade Agreement (NAFTA). This United States-Mexico-Canada Agreement (USMCA) is barely a week old, and yet has already been criticized by several groups. While they do have reasons to complain, there is also much to be satisfied within this new deal.

First things first, the good news! Canada has been exempted from the new tariffs that Trump will be imposing on cars and trucks, which will protect our automobile production sector. There are also new standards for automobile production. For a car or truck to be considered North American made, 75% of it must have been produced on this continent, which is up from the 62.5% of NAFTA.

This deal also ends the U.S.’s guarantee for Canadian oil and energy, granted by the Energy Proportionality provisions of NAFTA. This will effectively return control of production to Canadian hands. There are several other upsides to this deal, including cultural exemptions and environmental regulations.

Now, the bad news. The first and most important concession that Canada had to make was with regards to our dairy farmers. American dairy products will now be duty-free, and Canada will have to massively reduce its exports of dairy. While the federal government is promising full compensation for these concessions, these concessions will still hurt Canadian dairy farmers.

Overall, it is important to remember that in all negotiations, concessions are made. Whether these concessions were worth it or not, only time will tell.

Originally Published in Bandersnatch Vol. 48 Issue 03 on October 10, 2018