USMCA a lost opportunity for freer trade between Canada and US: report
Fraser Institute says opportunity squandered with protected industries that were off-limits from the start.
VANCOUVER — Is the United States-Mexico-Canada Agreement (USMCA) a missed opportunity to create freer trade across North America? The Fraser Institute, a Canadian public policy think-tank says so.
A new study identifies how USMCA differs from NAFTA, and what elements of the two agreements are the same. But Gary Hufbauer, a senior fellow with the Peterson Institute for International Economics and co-author of an overview report, said both sides came to the table with a list of protected industries that were off-limits from the start. He said this squandered an opportunity to “truly liberalize trade” between Canada and US.
He cites dairy, telecommunications and banking as examples. USMCA only increases US access to Canada’s dairy market from 3% to 3.59% while previous protections for the telecommunication and banking sectors remain intact. So Canadians will continue to pay comparatively higher cellphone bills and banking fees.
As for the North American auto sector, the there’s much more managed trade, including the imposition of limits on how many automobiles (and auto parts) Canada and Mexico will send into the US, and tighter rules of origin requirement for auto parts.
“Clearly, for the auto sector, the USMCA is a step backwards to the managed trade days of the 1960s,” said Steven Globerman, study co-author and Fraser Institute senior fellow. “This new free trade deal is much more about protecting domestic producers than about benefiting consumers or liberalizing trade across the continent.”
Click here for a copy of the US-Mexico-Canada-Agreement: Overview and Outlook report.