Key Takeaways:
- The US has outlined its demands for Canada to maintain free trade between the two countries, including opening up the Canadian dairy market to US farmers and revising the Online Streaming Act.
- The US also wants Canadian provinces to lift their ban on selling American liquor, which was imposed in response to President Donald Trump’s tariffs.
- Other issues include resolving the Alberta-Montana electricity dispute and addressing "discriminatory procurement measures" in Ontario, Quebec, and British Columbia.
- The USMCA (United States-Mexico-Canada Agreement) is under review, and the US is seeking changes to the agreement in order to continue it.
- Canada and Mexico want the USMCA to be extended, but Trump has expressed hesitation about leaving the agreement.
Introduction to US-Canada Trade Talks
The United States has laid out its clearest demands yet for maintaining free trade with Canada, with US trade representative Jamieson Greer outlining the country’s requirements to a Congressional committee on Wednesday. The list of demands includes opening up the Canadian dairy market to US farmers, revising the Online Streaming Act, and lifting the ban on selling American liquor in Canadian provinces. These demands are part of a broader review of the USMCA, which is currently underway. The USMCA is a trade agreement between the US, Canada, and Mexico, and both Canada and Mexico are seeking to extend the agreement, although Trump has expressed some hesitation about leaving it in place.
Dairy Market Access
One of the main points of contention between the US and Canada is the Canadian dairy supply-management system. The system strictly controls production quotas and imports to support local farmers, resulting in higher prices for dairy products in Canada. The US believes that this system unfairly restricts market access for its dairy products in Canada and is seeking to bolster access under the USMCA. Greer also wants Canada to address its exports of certain dairy products to the US, which the US accuses of being dumped at a low price and undercutting competition. Despite Canada’s initial resistance to changing its dairy supply-management system, the country did concede to allowing greater access for US dairy products at low or zero tariffs during the last review of the USMCA.
Online Streaming Act
Another point of contention is the Canadian Online Streaming Act, which was passed in 2023 by the government of former Prime Minister Justin Trudeau. The law requires American media companies like Netflix and Spotify to pay to support Canadian content and promote it on their platforms. The US believes that this law discriminates against US tech and media firms and is seeking to have it revised. The US is also looking for resolution on the Online News Act, a separate Canadian law that requires tech giants like Meta and Google to pay news outlets for content that appears on their platforms in Canada. The law has been contentious, with Meta blocking news access for Canadian users on Facebook and Instagram since its inception to protest the changes.
Liquor Sales
The US is also seeking to have Canadian provinces lift their ban on selling American liquor, which was imposed in response to President Donald Trump’s tariffs. The move has been painful for American liquor producers, who say the boycott has contributed to a significant decline in sales. Most provinces, with the exception of Alberta and Saskatchewan, have stopped selling US liquor, and Ontario’s Premier Doug Ford has said that the products will remain off the shelves until a tariff deal or a renegotiated USMCA is in place.
Other Issues
In addition to the main demands outlined above, the US is also seeking to resolve several other issues with Canada. These include addressing "discriminatory procurement measures" in Ontario, Quebec, and British Columbia, as well as "complicated customs registration" for US exports in Canada. The US is also seeking to resolve a dispute between Alberta and Montana over electricity sales, with the US accusing Alberta’s non-profit electrical grid operator of blocking Montana-based electricity producers from accessing the Alberta market. The Alberta government has denied this, saying that it does not treat generators in the US any differently.
Conclusion
In conclusion, the US has outlined its demands for Canada to maintain free trade between the two countries. The demands include opening up the Canadian dairy market to US farmers, revising the Online Streaming Act, and lifting the ban on selling American liquor in Canadian provinces. The US is also seeking to resolve several other issues with Canada, including addressing "discriminatory procurement measures" and resolving the Alberta-Montana electricity dispute. The USMCA is currently under review, and the US is seeking changes to the agreement in order to continue it. Canada and Mexico are seeking to extend the agreement, but Trump has expressed some hesitation about leaving it in place. The outcome of these negotiations will have significant implications for trade between the US and Canada, and it remains to be seen whether the two countries will be able to come to an agreement.
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