Key Takeaways
- Canada will need to increase access to the US market for dairy products as part of a renegotiated U.S.-Mexico-Canada Agreement
- The US has raised concerns about Canada’s dairy market access and export policies
- Other issues to be addressed in the renegotiation include digital services trade, provincial bans on US alcohol distribution, and discriminatory procurement measures
- The US aims to strengthen rules of origin for non-automotive industrial goods to ensure benefits flow to all three countries
- The renegotiation of the trade agreement is part of a six-year joint review
Introduction to the Renegotiation
The United States, Mexico, and Canada are set to renegotiate the U.S.-Mexico-Canada Agreement, with several key issues on the table. According to U.S. Trade Representative Jamieson Greer, concerns related to dairy market access in Canada and its exports of certain dairy products are part of a "non-exhaustive" list of issues that need to be addressed as part of the six-year joint review of the trade agreement. This indicates that the US is seeking to increase access to the Canadian market for its dairy products, which could have significant implications for the Canadian dairy industry.
Dairy Market Access Concerns
Greer’s comments suggest that the US is taking a firm stance on the issue of dairy market access in Canada. He noted that "virtually all stakeholders" called for some sort of improvement to the Agreement, with some expressing support for an extension only if certain improvements were made. One stakeholder group specifically cited the need to address concerns "related to Canada’s dairy policies" in order for the agreement to be renewed. This suggests that the US is under pressure from its own dairy industry to secure better access to the Canadian market, and that Canada’s current policies are seen as restrictive.
Other Issues on the Table
Aside from dairy, there are several other issues that will be addressed in the renegotiation. Greer mentioned that Canada’s Online Streaming Act, which discriminates against US tech and media firms, is a point of contention. Additionally, provincial bans on US alcohol distribution, discriminatory procurement measures in Ontario, Quebec, and British Columbia, and complicated customs registration for Canadian recipients of US exports are all issues that need to be resolved. Furthermore, Alberta’s unfair treatment of electrical power distribution providers in Montana is also on the table. These issues highlight the complexity of the trade relationship between the US and Canada, and the need for a comprehensive renegotiation of the agreement.
Digital Services Trade and Rules of Origin
The renegotiation will also focus on digital services trade, with the US seeking to address Canada’s restrictive policies in this area. Greer noted that Canada maintains policies that unfairly restrict market access for US dairy products, and that the Online Streaming Act is a major concern. The US is also seeking to strengthen the rules of origin for non-automotive industrial goods, to ensure that the benefits of trade in these products flow substantially to all three countries. This could involve changes to the way that goods are classified and certified, and could have significant implications for industries such as manufacturing and logistics.
Conclusion and Next Steps
The renegotiation of the U.S.-Mexico-Canada Agreement is a complex and multifaceted process, with several key issues on the table. The US is seeking to increase access to the Canadian market for its dairy products, address restrictive policies in areas such as digital services trade, and strengthen the rules of origin for non-automotive industrial goods. Canada, on the other hand, is likely to resist some of these changes, and will seek to protect its own industries and policies. As the renegotiation moves forward, it will be important for both countries to engage in good-faith negotiations and to seek mutually beneficial solutions to these complex issues. Ultimately, the outcome of the renegotiation will have significant implications for trade between the US and Canada, and for the broader North American economy.
