What's Happening?
The Canada–United States–Mexico Agreement (CUSMA), known as USMCA in the U.S., is up for renewal. This trade pact, which replaced NAFTA in 2020, has significantly boosted North American agri-food trade to nearly CAD 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, representing sectors like beef, pork, and seafood, emphasize the importance of maintaining science-based sanitary and phytosanitary (SPS) rules, biotechnology clarity, and dispute settlement provisions. However, grain, oilseed, and pulse organizations did not sign the letter due to concerns over its rigid 'no changes' stance,
which they fear could lock in protections for supply-managed sectors, hindering future reforms.
Why It's Important?
The renewal of CUSMA is crucial for maintaining economic stability and food security across North America. The agreement's science-based framework has been instrumental in tripling agri-food trade, supporting rural communities, and providing predictable market access. However, the debate over its renewal highlights a tension within Canadian agriculture. While supply-managed sectors seek stability and protection, export-driven sectors like grain producers advocate for flexibility to adapt to market changes and improve global competitiveness. The outcome of this renewal process could significantly impact trade policies, market access, and the ability of Canadian agriculture to modernize and respond to emerging challenges.
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 push for language that maintains science-based trade rules while allowing for targeted adjustments. Their goal is to ensure that North American trade remains robust while providing Canada the flexibility to modernize its agricultural policies as needed. This ongoing negotiation will likely involve discussions on balancing domestic protections with the need for openness and reform in the face of evolving market realities.
