NAFTA dedicates chapter to small biz, but issues still remain

The CFIB welcomes the federal government’s agreement to include a new chapter that’s focused on small and medium-sized enterprises (SMEs) in NAFTA.

That chapter will help SMEs benefit from NAFTA through cooperative activities and information sharing. Also, through the establishment of a small business committee involving the private sector, non-government organizations and other stakeholders.

Read: New Canadian task force will work with NAFTA negotiators

Corinne Pohlmann, senior vice-president, National Affairs, at CFIB, says, “When it comes to importing or exporting goods and services, SMEs sometimes lack the resources of larger firms,” and adding an SME chapter to the trade agreement will encourage “more small businesses in Canada to trade with our partners in North America.”

Read: Business heads in Canada, U.S. and Mexico form alliance to create jobs

Small and medium-sized enterprises in Canada are key stakeholders in the tri-lateral pact, which helps to facilitate approximately US$1 trillion in trade between Canada, the U.S. and Mexico, notes the CFIB. Data from Industry Canada shows that, of all the exporting firms in Canada, more than 90% are considered small businesses.

Issues with NAFTA still remain

While some issues related to SMEs have been resoled, U.S. trade representative Robert Lighthizer says an enormous amount of work still needs to be done on other, similarly difficult matters.

He says delegates made significant progress on competition policy, digital trade, state-owned enterprises and telecommunications in the third round of talks between Canada, the U.S. and Mexico. Details on the treaty chapter they agreed on were not available.

Read: Focus shifts from NAFTA to Canada-EU trade outcome

Canadian foreign minister Chrystia Freeland says that on potentially the most difficult areas the U.S. has not introduced formal proposals or text. Freeland adds Canada can’t respond to something that has not been introduced.

Mexican Economy Secretary Ildefonso Guajardo also says there are “substantial challenges” to come.

U.S. president Donald Trump has called the 1992 trade deal the worst in history.

The U.S. wants to eliminate NAFTA’s Chapter 19 private arbitration panels, while Canada wants to keep them. The panels can overrule tariffs, making it harder for the U.S. to unilaterally block products.

Among other things, Washington wants local-content rules tightened to avoid imports largely made in third countries from being considered “made in North America” just because they were assembled in Mexico. Freeland says the U.S. has not introduced a proposal on rules of origin.

A fourth round of negotiations is scheduled for October 11 to October 15 in Washington.