How have Canadians reacted to CUSMA?

Abacus Data conducted an online survey poll with 2,137 Canadian respondents from December 13 to 19th, asking “Is the new CUSMA deal good or bad for Canada?” The results showed that the majority of Canadians regardless of political background, believe that the new CUSMA deal with benefit Canada.

Ekos Politics, conducted a similar survey to Abacus with an addition of a time series plot; the results serve to illustrate the change in Canadian opinion of NAFTA post 1995. Interestingly enough, in 2018, during the discussions of the future of NAFTA negotiations between Canada, US, and Mexico, the polls show an overwhelmingly 81% of Canadians supporting the continuation of free trade relations with the US and Mexico; The arrival of CUSMA is the answer to Canadian eagerness to preserve the North American trade bloc.

The greatest period of uncertainty for the Canadian occurred during President Trump’s placed tarrifs of 25% and 10% on Canadian Steel and Aluminum respectively; Canada was forced to retaliate by placing tariffs on US imports and threaten an additional $3.6 billion tariff, leading to the US recalling their tarrifs. Experts and the media warned that this “tit-for-tat” trade dispute can escalate into a trade war. This has seen Speculations from this uncertain period triggered great unease for many Canadians, who have seen the mutual benefits of free-trade deals with the United States.

What are the expert opinions?

Contrary to public opinion, Ontario based C.D. Howe Institute criticizes CUSMA as an “[economic] welfare damaging agreement that may not survive ratification and perhaps should not survive.” Howe Institute claims that CUSMA is a means of fulfilling former President Donald Trump’s vision of “re-industrializing the US economy” and “rebalance American trade.” In other words, the Howe Institutions is warning that CUSMA is politicized as a move by President Trump to shift industries to the US.

The silver lining the Howe Institute provides is that within CUSMA the new deal is unlikely to drastically alter the economies of the trilateral trade bloc. Instead, CUSMA can be seen as a revitalized trade alliance that serves to counter the rise of China and maintain economic independence in the wake of ever-accelerating globalization; Despite former President Trump calling NAFTA as "the world trade deal ever made", the US still acknowledges the importance of maintain free-trade with their Canadian and Mexican allies, CUSMA serves to promote closer cooperation and technological integration for the North American trade bloc.

Agriculture:

****Despite contravening the principles of NAFTA of no trade barriers, Canada’s high tariffs on US dairy products (ranging from 270% to 310%), has allowed Canadian dairy businesses to monopolize Canada’s domestic dairy market. The C.D. Howe Institute points out that the current Canadian supply management system can continue to offer a high degree of protection for their dairy farmers, but America now has market access to Canada. Tariffs on US dairy products such as whey proteins have been eliminated, paving way for US dairy products to be presented in the once closed Canadian dairy market.

Canadian Agricultural Industry

Representing over 200,000 farmers across Canada, the Canadian Federation of Agriculture (CFA), has welcomed the renewal of NAFTA in the from of CUSMA; their statement also addressed concerns over the concessions made by the Canadian federal government for allowing US access to the once monopolized Canadian dairy market. As CFA represents over 200,000 farmers across Canada, agricultural economic contribution has totalled to over $143 billion; therefore, the organization themselves stresses the need for the Canadian federal government to cease future concessions, worrying that further Canadian market access may lead to price fluctuations and disrupt the already stable industry. The concessions were necessary to preserve Canada’s supply management system, as the industry still remains protected by the federal government, the Canadian government has issued compensation for Canadian farmers who will be affected by CUSMA terms.

Global Affairs Canada (GC) provides a quantitative figure of the impact of CUSMA on Canadian agricultural industry. CUSMA permitted Canada to utilize a new tariff rate quota to the US, in regards to refined sugar and sugar-containing products would become actualized. Under this new tariff rate quota, export to the US is expected to increase by 20 million USD. Under CUSMA, Canada is bound to permit US chicken and egg producers to enter the Canadian market, which GC considers to have a negligible impact on the Canadian market.