Key Takeaways
- The US is requiring Canada to meet certain conditions to extend the Canada-US-Mexico Agreement (CUSMA) when it comes up for review next year.
- The conditions include bolstering market access for US dairy products, addressing Canada’s exports of certain dairy products, and revising the Online Streaming Act.
- The US is also demanding that Canada address provincial bans on the distribution of US alcohol beverages, discriminatory procurement measures, and complicated customs registration.
- The US Trade Representative, Jamieson Greer, has left open the possibility of separate bilateral deals with Canada and Mexico as opposed to a comprehensive trilateral pact.
- The CUSMA review is expected to be a crucial test of the trade relationship between the US, Canada, and Mexico, with the US seeking to address several key issues before agreeing to extend the agreement.
Introduction to CUSMA Review
The Canada-US-Mexico Agreement (CUSMA) is set to come up for review next year, and the US is requiring Canada to meet certain conditions to extend the agreement. US Trade Representative Jamieson Greer has outlined a series of conditions that Canada must meet in order to secure an extension of the agreement. Greer told the US Congress that CUSMA has been "successful to a certain degree" but there need to be changes before the US agrees to extend it for another 16 years or revert to yearly reviews. This is a significant development, as Canada is eager to avoid the resulting annual uncertainty that would come with yearly reviews.
US Conditions for CUSMA Extension
The US is taking aim at two major Canadian policies: the Online Streaming Act and the supply-managed dairy sector. Greer said that for the CUSMA review to be successful, Canada must bolster "market access for US dairy products" and address "Canada’s exports of certain dairy products". The US is also demanding that Canada revise the Online Streaming Act, which brought online platforms like Netflix, Spotify, and YouTube under Canadian broadcasting rules. Greer argued that the legislation "discriminates against US tech and media firms" and needs to be revised. Additionally, the US is seeking to address provincial bans on the distribution of US alcohol beverages, discriminatory procurement measures, and complicated customs registration.
Impact on Canada-US Trade Relationship
The CUSMA review is expected to be a crucial test of the trade relationship between the US, Canada, and Mexico. The US is seeking to address several key issues before agreeing to extend the agreement, including the supply-managed dairy sector and the Online Streaming Act. Canada has repeatedly stressed that supply management is a non-starter, and it remains to be seen how the two countries will navigate this issue. The US dairy lobby is pushing for looser rules on dairy trade, but Canada has been resistant to making significant changes. The outcome of the CUSMA review will have significant implications for the trade relationship between the US and Canada, and it is likely to be a major point of contention in the coming months.
Possible Outcomes of CUSMA Review
Greer left open the possibility of separate bilateral deals with Canada and Mexico as opposed to a comprehensive trilateral pact like what exists now. This could potentially lead to a more complicated trade landscape, with different agreements governing trade between the US, Canada, and Mexico. However, Greer also acknowledged that some continental-wide issues, such as rules of origin, critical minerals, or economic security alignment, are best addressed collaboratively with all three partners. The CUSMA review is expected to be a complex and contentious process, with multiple stakeholders and interests at play. The outcome will depend on the ability of the US, Canada, and Mexico to negotiate and compromise on key issues.
Conclusion and Future Prospects
In conclusion, the CUSMA review is a critical moment in the trade relationship between the US, Canada, and Mexico. The US is seeking to address several key issues, including the supply-managed dairy sector and the Online Streaming Act, before agreeing to extend the agreement. Canada is eager to avoid the resulting annual uncertainty that would come with yearly reviews, and is likely to push back against US demands. The outcome of the CUSMA review will have significant implications for the trade relationship between the US and Canada, and it is likely to be a major point of contention in the coming months. As the review process moves forward, it will be important to watch how the US, Canada, and Mexico navigate these complex issues and work towards a mutually beneficial agreement.