The U.S. is also Canada’s largest trading partner and the destination of about three-quarters of our exports in any given year. The economies of our two nations are deeply integrated, a situation that is reflected in the enormous value of our bilateral trade.
The announcement of a new Canada-United States-Mexico Agreement (CUSMA) is a promising sign that there will be a continuity of free trade between these three North American countries, providing stability for their economies and supply chains, which are intricately linked.
The CUSMA is expected to provide a framework for 21st century trade. But it will rely on the foundational North American Free Trade Agreement (NAFTA). The agreement, which came into effect in 1994, provides a comprehensive set of rules for trade in goods and services, investment, intellectual property and dispute settlement between Canada, the United States and Mexico. Although the CUSMA will adapt, add or disregard some elements in the original NAFTA, the spirit of the agreement remains.
One of NAFTA’s major achievements was the elimination of tariffs on most goods originating in the member nations. A second has been the liberalization of regulations affecting matters such as investment and the cross-border trade in services. A third has been to provide North American businesses with better access to materials, technologies, investment capital and talent.
With a new free trade agreement-in-principle now on the table, the CUSMA will continue to benefit Canadian businesses operating in the U.S. market.
