Skip to content
Join our Newsletter

What U.S.-Mexico trade provisions mean for Canada and B.C.

NAFTA chapter Changes How Canada and B.C. benefit, according to TD economists Rules of Origin Requires 75% of auto content to be made in the U. S.
chinesepodcast28

NAFTA chapter

Changes

How Canada and B.C. benefit, according to TD economists

Rules of Origin

Requires 75% of auto content to be made in the U. S. and Mexico

The augmented rules of origin for the auto industry are considered a win for manufacturers located in higher-cost jurisdictions such as Canada.

Requires 40% to 45% of auto content be made by people earning at least $16 per hour.

Consumers are likely to be the losers as higher cost of parts and assembly will likely be passed on.

Stronger enforcement on rules of origin.

This should make for an easy hurdle for Canadian manufacturers to clear, with a large share of U.S. and Canadian manufacturing facilities (and products) already meeting these new requirements.

Sunset Clause

The agreement will be reviewed every six years. At that time, if one or more parties expresses a desire to alter the trade pact, there would be a ten-year window to resolve issues before the agreement would end.

Concerns about the sunset clause were rooted in fears that it would discourage long-term investment in Canada, particularly affecting the energy industry.

Intellectual property

Strengthened intellectual property laws to the U.S. standards of 75-year copyright and 10-year data protection for biologicals.

May be deemed as a threat to certain Canadian industries, such as the thriving Canadian generic pharmaceuticals industry.

Goods Market Access

Adds new provisions for transparency around import and export licensing.

Prohibits requirements to use local distributors for importation.

Prohibits restrictions on used and remanufactured goods.

Textiles

Promotes greater U,S, and Mexican production of textiles and apparel.

Limits use of non-NAFTA inputs and requiring that thread, elastic bands, coated fabrics and other inputs be made in the region to qualify for trade benefits.

Establishes textile chapter for U.S.-Mexico trade