New USMCA will replace NAFTA but did we surrender too much?

Early last month I wrote that the NAFTA negotiations could result in a similar deal that sports a new name.  That happened over the last weekend and while there is a long way to go to ratify the United States, Mexico, Canada Accord, a deal is in place.  The results will be analyzed for months, but upon first glance it is clear that government negotiators surrendered more than they had hoped to in order to meet the deadline that was needed for the USMCA to be ratified before elections in the US and Mexico.

To be clear, this has been a very difficult process and although many Canadians may be relieved that a deal was reached, there were a lot of promises from the government that didn’t make it in.  Some analysts are suggesting that instead of getting a better deal, we seem to be getting a new name, but a worse deal.

Dairy and egg producers are among the biggest losers, but they are not alone in feeling disappointed. What began as negotiations that promised to defend dairy, poultry and egg farmers and to bring in new progressive measures such as a gender chapter, a chapter on the rights of Indigenous peoples, and stronger environmental protections, ended with all those items on the cutting room floor.

Instead, there are major concessions that will hurt dairy, poultry and egg farmers and producers which will restrict Canadians’ access to locally produced food and could put food safety at risk.  Now, Canadians will have to be more careful to ensure that the milk they are drinking is safe and doesn’t include additives like bovine growth hormones.  The deal also gave the US a major concession on our poultry and egg industry. We know that many farmers already feel undervalued by government policies and this deal will only add to that sentiment – with good reason.

Worse, the new deal failed to get any assurances that the US will lift aluminum and steel tariffs which could result in the loss of at least 6,000 jobs. While there is hope that this might be a pressure tactic to coerce Canada to ratify the deal, there is no guarantee of that and many people’s livelihoods hang in the balance.

The deal will make medication even more expensive because it extends the protection for biologic drugs from 8 to 10 years. That will only increase drugs costs for Canadians living with rheumatoid arthritis, Crohn’s and other chronic conditions. Ultimately, the deal will increase costs for public and private drug plans by tens of millions of dollars every year.

There are implications for intellectual property, copyright protection,  and the deal did nothing to remove the Buy American policy that many state and local governments employ.  This amounts to protectionism and it is difficult to see how leaving that measure intact amounts to ‘free trade’.

It is widely reported that Canada and Mexico took a do no harm approach to negotiations, but it also clear that concessions ruled the day.  There is great relief that the auto industry wasn’t impacted significantly as job losses in that sector could have been catastrophic. Despite that, we appear to have accepted a deal that leaves us worse off than the one we are replacing.