Canada is one of the United States` largest trading partners. The two countries share one of the world`s largest and most comprehensive trading relationships, with total trade between the two nations valued at nearly $700 billion in 2019. The trade agreement with Canada plays an important role in facilitating this trade and ensuring that it is fair and beneficial to both nations.
The trade agreement with Canada is officially known as the Canada-United States-Mexico Agreement (CUSMA). It was signed by the leaders of the three nations in November 2018 and came into effect on July 1, 2020. The CUSMA replaced the North American Free Trade Agreement (NAFTA), which had been in place since 1994.
The CUSMA is designed to modernize and update NAFTA, addressing some of the criticisms and concerns that had been raised over the years. One of the key changes is an increase in the amount of North American content required for many goods to be traded duty-free. Under NAFTA, this requirement was set at 62.5%, but under the CUSMA, it has been raised to 75%.
The CUSMA also includes new provisions on a range of issues, including digital trade, intellectual property, and labor and environmental standards. For example, the agreement requires all three nations to adopt and enforce laws prohibiting the importation of goods produced by forced labor. It also includes new rules to protect intellectual property, such as patents and trademarks, and to facilitate cross-border data flows.
Another significant change under the CUSMA is the introduction of a dispute resolution mechanism that is more favorable to the United States. Under NAFTA, disputes between the nations were largely resolved through arbitration. But under the CUSMA, the United States can demand a panel of judges to hear disputes involving Canadian and Mexican goods.
Overall, the trade agreement with Canada is an important part of the United States` trade relationship with its northern neighbor. It provides a framework for fair and open trade between the two nations, while also addressing some of the challenges and concerns that have arisen over the years. As the two nations continue to work together and adapt to changing circumstances, the trade agreement will play an important role in ensuring that their economies remain strong and prosperous for years to come.