Canada and the U.S. Come to Terms on Free Trade

Canada and the U.S. Come to Terms on Free Trade

After a tense 13 months of North American Free Trade Agreement (NAFTA) negotiations between the U.S. and Canada, both nations have agreed on terms under the new United States-Mexico-Canada Agreement (USMCA).

The USMCA will replace NAFTA. It includes significant changes that will affect the North American auto and dairy industries. The agreement came at the eleventh hour, just before a U.S.-imposed deadline to allow outgoing Mexican President Enrique Pena Nieto to sign the deal before he leaves office.

In a joint statement, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said, “USMCA will give our workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region. It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.”

According to reports, Canadian Prime Minister Justin Trudeau made concessions on dairy products to allow American farmers more access to the Canadian market. In turn, the number of annual exemptions for Canadian car exports will increase from 1.8 million to 2.6 million in the USMCA deal, a threshold that is expected to exceed the number of cars Canada exports to the U.S. per year. The deal also raises the minimum wage for Mexican auto part manufacturing workers, which increases the favorability of manufacturing in the U.S. and Canada.

On social media, President Donald Trump said the USMCA “solves the many deficiencies and mistakes in NAFTA, greatly opens markets to [U.S.] farmers and manufacturers, reduces trade barriers to the U.S., and will bring all three Great Nations together in competition with the rest of the world.”

If the trilateral agreement is adopted, the next step will require the governments of the U.S., Canada, and Mexico to assess, codify and implement the agreement. This process is expected to take at least a year, and could be impacted by the November elections in the U.S. and Mexico’s incoming president.

North American companies that import and export products from other North American countries will need to evaluate the products coming through customs to determine the impact of USMCA and accurately calculate tariffs.

Assent’s Trade Classification and Origin Module allows companies to collect and manage supply chain data, Harmonized Item Description and Coding System (HS)/Harmonized Tariff Schedule (HTS) codes, country of origin certificates and free trade agreement data in one workflow.

To learn more about how Assent can help you manage your supply chain data and navigate free trade agreements, email

Photo: President Donald Trump and Canadian Prime Minister Justin Trudeau shake hands during a joint press conference. Official White House Photo by Shealah Craighead.