What's Happening?
The Canada–United States–Mexico Agreement (CUSMA), known as USMCA in the United States, is up for renewal. This trade pact, which replaced NAFTA in 2020, is crucial for North American agri-food trade, which has surged to nearly CDN$400 billion annually.
Recently, 98 Canadian agriculture and agri-food organizations signed a letter urging the Canadian government to renew CUSMA for its full 16-year term without changes. These organizations, including those representing beef, pork, and dairy, emphasize the importance of maintaining science-based rules and regulatory clarity. However, grain, oilseed, and pulse organizations did not sign the letter. They support CUSMA's core principles but are concerned that the 'no changes' stance could lock in protections for supply-managed sectors like dairy and poultry, potentially hindering future reforms. These groups advocate for flexibility to improve market access and adapt to emerging trade barriers.
Why It's Important?
The renewal of CUSMA is significant for the stability and growth of North American trade, particularly in the agri-food sector. The agreement provides a predictable framework that supports food security and rural communities. However, the differing perspectives within the Canadian agricultural sector highlight a critical tension. While supply-managed sectors seek stability, export-driven grain producers emphasize the need for adaptability to remain competitive globally. This debate underscores the necessity for trade agreements to evolve with market realities, ensuring they do not become outdated or restrictive. The outcome of this renewal process could impact the balance between domestic protections and international competitiveness, affecting stakeholders across the agricultural industry.
What's Next?
The formal six-year review of CUSMA is set to begin in mid-2026. During this period, grain groups are expected to advocate for language that allows for targeted adjustments while preserving science-based trade rules. Their goal is to maintain strong North American trade relations while ensuring that Canada can modernize its agricultural policies as needed. The review process will likely involve negotiations to address the concerns of both supply-managed and export-oriented sectors, aiming to find a balance that supports the diverse needs of the Canadian agricultural industry.
