Is CUSMA the best path out of the trade war with the U.S.?
CBC
Business leaders were hopeful the White House meeting between Prime Minister Mark Carney and U.S. President Donald Trump would provide a framework for how trade talks may progress.
After the two leaders spoke in the Oval Office, an unlikely winner appears to be emerging: the Canada-U.S.-Mexico Agreement on trade (CUSMA, or USMCA as it's called in the United States).
At his Oval Office meeting with Carney, Trump was asked if USMCA is dead.
"No, it was actually very effective and it's still very effective. But people have to follow it. That's been the problem, people haven't followed it," Trump said.
In the very next breath, he mused that the trade deal was a transitional step that may not be needed in the future.
But his embrace of the agreement might be just enough to reset the parameters of the Canada-U.S. trade talks.
"I think the president has opened a wide open door and we need to drive through it," said Goldy Hyder, president of the Business Council of Canada.
Since the outbreak of the trade dispute, Hyder has said repeatedly that CUSMA is the best mechanism to resolve the conflict. He says many Canadian companies didn't have to take steps to become CUSMA compliant because they were given "Most Favoured Nation" status under previous trade deals.
Trump has repeatedly accused the Canadians of cheating. And some say having so many products that are non-compliant with CUSMA added fuel to that.
RBC economics says the vast majority of Canadian exports could be CUSMA compliant if the companies went through the process.
"By our count, more than 94 per cent of Canadian exports to the U.S. are likely compliant with CUSMA rules of origin," wrote RBC's deputy chief economist Nathan Janzen.
Hyder says going through the process of making sure most Canadian products are actually compliant under the new deal, as opposed to old deals, will help assuage some of the concerns from the White House.
He says that message was made loud and clear by the president during his public statements with Carney.
"A recognition very publicly that the best way forward is through the USMCA," said Hyder.
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