USMCA missed the opportunity to create a freer trade: study

The bright new US-Mexico-Canada (USMCA) agreement could serve as a useful replacement for the former North American Free Trade Agreement (NAFTA), but it is a missed opportunity to liberalize trade in North America, according to a study by the Fraser Institute.

The study – titled The US-Mexico-Canada Agreement: Overview and Prospects – indicated that the opportunity to present a list of the industries protected by Canada, the United States and Mexico, respectively, was wasted. Gary Hufbauer, co-author of the study and principal investigator at the Peterson Institute for the International Economy, said that during the negotiations with the USMCA, it was possible to "genuinely liberalize trade between Canada and the United States. -United".

"(But) this opportunity was spoiled because both sides arrived at the table with a list of protected industries that were banned from the start," said Hufbauer in a press release.

The Fraser Institute study shows how the new USMCA differs from NAFTA and which parts of the agreements are identical. For example, the new agreement leaves protections intact in various sectors, which is detrimental to Canadians according to the study, for example by increasing the US access to the Canadian dairy market from 3% to 3.59%.

Some of the protections for the telecommunications and banking sectors remain intact for Canadians, meaning that residents will continue to shell out more money to increase their mobile phone bills and bank charges.

In the automotive sector, the USMCA is launching a better managed business, limiting the number of vehicles and parts that Canada and Mexico can send to the US, while tightening the "rules of origin" required to car parts.

"For the automotive sector, USMCA is clearly a step back from the managed business days of the 1960s," said Steven Globerman, co-lead author of the Institute and co-author of the study, in a press release. "This new free trade agreement is much more about protecting domestic producers than the benefit of consumers or the liberalization of trade across the continent."