APAS president not surprised by U.S. decision not to extend CUSMA

Some experts say if an annual review of CUSMA is done right, it could provide opportunities to address trade issues between the North American countries.

One of the main irritants for the U.S. on the agriculture side of the deal is Canada’s supply-managed industries. From what Prybylski has read, the Americans have an issue with enforcement of the rules.

“There’s definitely room for improvement on that, and that may be enough to satisfy the irritants and put those to rest so that the agreement can be administered as it was intended,” he said.

It’s been reported that the U.S. has about 60 trade issues with Mexico and about 30 with Canada.

Farm Credit Canada has been paying close attention to CUSMA developments.

FCC released a report earlier this month discussing what would happen if the agreement is not renewed.

It details the impacts U.S. tariffs have had on Gross Domestic Product and business confidence over the last year, as well as how it could impact the Bank of Canada interest rate.

FCC came up with three possible outcomes of the review:

1) CUSMA is renewed as status quo and tariffs are removed, resulting in a boost to the GDP.

2) CUSMA is terminated, which would result in an economic downturn.

3) An “in the middle” outcome where tariffs would remain, and the agreement would be reviewed on an annual basis, resulting in continued uncertainty and slow GDP growth.

Farm Credit Canada said the third scenario is the most realistic compared to the first two.

FCC Vice-president and Chief Economist Craig Johnston said this latest development is not the end of the world.

“We enter this renewal cycle. So, every year there’s a review that takes place. There are so many different possibilities that can happen here. Countries can agree to extend for another 16 years, pushing us to 2042,” Johnston said. “We can continue through this annual review process for another 10 years and ultimately there can be some renegotiations as well within the review.”

Johnston said the uncertainty surrounding the trade agreement leading up to the review does weigh on the Canadian agriculture sector.

You can read the FCC report “What happens to Canada if CUSMA is not renewed?”

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alice.mcfarlane@pattisonmedia.com

by Pattison Media

APAS president not surprised by U.S. decision not to extend CUSMA

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