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Canada-United States-Mexico Agreement (CUSMA)

The Canada-United States-Mexico Agreement (CUSMA) is a free trade agreement between Canada, the United States, and Mexico. The trade promoted economic growth and raised the standard of living of all three countries.

 

The CUSMA agreement came into effect on November 30, 2018, and replaced the North American Free Trade Agreement (NAFTA). The CUSMA was further updated with a new set of elements on December 10, 2019.

 

The agreement offers outcomes for businesses, communities, and workers based in Canada in the fields mentioned below:

• Automotive
• Trade
• Dispute resolution
• Energy
• Environment
• Labor
• Agriculture and Agri-food
• Culture

 

 

Trade

CUSMA offers benefits and ensures a majority of the trade from North America will be duty-free. The modernized and customized procedures of the customs administration and trade facilitation also contribute to the free flow of goods within the countries. Technical barriers for trade have been put to ease the export process for Canadian businesses within the CUSMA regions.

The minimum thresholds for shipments are set at:

• C$150 for duties
• C$40 for taxes

 

Agriculture  

Some of the advantageous outcomes that Canada has secured for agriculture as  aprt of the agreement are:

• Tariff rate quotas for refined sugar and sugar-related products along with certain dairy products.   
• A new committee on Agriculture Trade will provide a platform to discuss issues and trade-related obstacles.
• Commissions for agricultural biotechnology that will promote transparency, innovation, and predictability.

 

Automotive

The new agreement for the automotive trade includes:

• The threshold for cars has increased from 62.5% to 75%.
• Better regional value content requirements for car parts, transmissions, and engines.
• 70% of the steel and aluminum requirements of North America.

 

Dispute resolution

CUSMA works on improving the original NAFTA agreement by:

• Conserving the binational panels to resolve disputes.
• Improving the state-wise dispute settlement process set by NAFTA.

 

 

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What does CUSMA do?

Some of the benefits of the CUSMA are as follows:

• CUSMA offers temporary entry for business people who are citizens of the US, Mexico, and Canada and who are involved in goods and services trade or investment activities.
• CUSMA eliminates the need for an LMIA (Labour Market Impact Assessment) for business people who are part of the agreement.
• Removes the requirement of a work permit for business visitors.
• Professionals who are Temporary Resident Visa (TRV)-exempt can have an expedited application processing time.

 

 

Who is eligible for CUSMA?

The temporary entry provisions are eligible for:

• Citizens of the US, Mexico, and Canada
• Citizens of the US, Puerto Rico, and the District of Columbia

 

The temporary entry provisions are not eligible for:

• Citizens of Guam, the Northern Mariana Islands, American Samoa, and the U.S. Virgin Islands; 
• Permanent residents of the three countries.

 

 

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CUSMA Free Trade Commission

The Free Trade Commission (FTC) is the Central institution of the CUSMA that includes government representatives from each party.

The roles of the commission are as follows:

• Ensuring the implementation of the agreement
• Propose to amend or modify any of the agreements  
• Supervise the work of the subsidiary bodies under the agreement
• Establish the code of conduct and rules of procedure
• Reviewing the dispute settlement panel
• Issuing interpretations of the provisions of the agreement.

 

 

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