Prime Minister Mark Carney’s newly anointed advisory committee on Canada-U.S. economic relations brings heavy hitters from politics, finance and industry — and with the Canada-U.S.-Mexico Agreement (CUSMA) review fast approaching, agriculture’s voice will be prominent. Slightly more than 20 per cent of the committee’s 24 members are stakeholders in the industry.
WHY IT MATTERS:: Having an agricultural voice on the advisory committee is critical to ensure the multibillion-dollar industry isn’t swept under the rug as CUSMA negotiations heat up.
“If you look at Canadian agri-food exporters and exports in general, you got $100 billion a year, of which $62 billion go to the United States,” said Michael Harvey, a committee member and executive director of the Canadian Agri-Food Trade Alliance, which represents 90 per cent of Canada’s agri-food exporters. “That’s $62 billion of exports that are at the table, and that voice wasn’t there in the council that the previous government had put together.”
Trump and the CUSMA review
U.S. President Donald Trump has been vocal on several trade issues involving CUSMA, including Canada’s supply management system. Trump negotiated the agreement with then prime minister Justin Trudeau in his first term, and it was implemented in 2020.
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Despite the noise, there’s been vocal support from both sides of the border for keeping the deal intact when it comes up for review July 1.
“The U.S. industry has come out a couple times with big public letters to USTR (United States Trade Representative), saying that they want to see the agreement renewed for 16 years, basically without changes,” Harvey said. Many signers list Canada in their top-five export markets.
“I think that’s because the American ag food sector sees that it works with Canadian and Mexican industry to produce food together, and because the American ag food sector wants to protect their tariff free-access to our markets.”
How the review works
CUSMA is designed to last 16 years, until June 30, 2036, but a formal joint review must occur in year six to prevent expiry. Each country must then confirm in writing whether it wants to extend the agreement another 16 years, to 2042. If all three parties agree, the deal is extended and the next review is set for 2032.
If any party doesn’t confirm support, CUSMA remains in force but annual joint reviews must take place until the scheduled 2036 expiry. Parties may still agree to extend at any point. Any country can also withdraw with six months’ written notice — if one pulls out, the agreement continues between the remaining two.
Speed vs. the right deal
The committee holds its first meeting Monday, April 26.
“I’d say, at a minimum, it is to get input from all the different sectors, and provide a way for some representatives of the sectors to get information out (to) the government negotiators in their sectors,” Harvey said.
“We’d like to get a deal quickly and take away this uncertainty that we’ve got over us. There’s not an absolute need for a quick deal, and if it takes time to get the right deal, then that’s better. The ag food sector would continue with the same rules, unless the United States decides something different. There’s some Canadian economic sectors that are under a lot more pressure and look to be more complicated than ours right now.”
Harvey sees a low probability that the review will splinter into separate bilateral deals — for that to happen, the U.S. administration would need to signal to Congress a clear desire for that outcome. “But, it wouldn’t surprise me if there were side letters on some of the more hotter issues. Like in Canada, if you look at say, steel, aluminum and autos. Mexico’s got a longer list of side issues.”
