United States-Mexico-Canada Agreement (USMCA)

On September 30, 2018, Canada, the United States and Mexico announced that they had reached a new and modern trade agreement called the United States-Mexico-Canada Agreement (USMCA).  This modernised agreement maintains the tariff-free market access from the original NAFTA, and includes updates and new chapters to address modern-day trade challenges and opportunities. Since negotiations began in August 2017, Canada has engaged constructively and pragmatically with our USMCA partners – always intent on achieving a good deal for Canadians, not just any deal.

The agreement provides key outcomes for Canadian businesses, workers and communities in areas such as labour, environment, automotive trade, dispute resolution, culture, energy, and agriculture and agri-food. Importantly, the USMCA recognises the importance of Small Medium Enterprises (SMEs) contribution to a healthy economy, progressive and inclusive trade, and includes language on gender and Indigenous peoples rights.

As an example, a  large number of these Canadian service suppliers, including small and medium-sized enterprises, are trading services at a distance using information technology. These companies will benefit from a modernised cross-border trade in services (CBTS) chapter in the United States-Mexico-Canada Agreement (USMCA), as it will provide more secure and predictable access to markets in the United States and Mexico.

A further example, USMCA will contain gender-related provisions in the following chapters:

Labour:

• Includes, for the first time, enforceable gender-specific obligations in a free trade agreement. Failure to respect these obligations may lead to trade sanctions against the non-compliant country.
• Contains enforceable obligations for governments to implement policies that address gender-based discrimination in the workplace, specifically with regard to pregnancy, sexual orientation, sexual harassment, gender identity, and caregiving responsibilities;
• Encourages the adoption of programs and policies that address barriers to the full participation of women in the workforce, such as obligations to provide job-protected leave for childbirth/adoption and family care responsibilities, and protect against wage discrimination;

• Proposes cooperative activities that address gender-related issues in the field of labour, including gender equity;

Investment:

• Includes a corporate social responsibility (CSR) provision that reaffirms the importance of encouraging businesses to respect CSR standards, such as the OECD Guidelines for Multinational Enterprises. This CSR provision provides an illustrative list of CSR areas, including gender equality and Indigenous and Aboriginal peoples’ rights.

Small and medium sized enterprises (SMES):

• Encourages parties to collaborate on activities that would enhance commercial opportunities for SMEs owned by under-represented groups, and promote their participation in international trade.

Explore the summaries or the full text of USMCA – log onto Global Affairs Canada website at www.international.gc.ca  and select Trade Negotiations and Agreements.

We hope you continue to pursue your work, partnerships and operations in the US and Mexico with gusto.

If you have questions, need for pathfinding or a desire to “know more” don’t hesitate to contact our Ontario Regional Office, Trade Commissioner Service at Ontario.TCS-SDC@international.gc.ca