When North American countries signed the successor to the NAFTA they included a provision for a mandatory review of the agreement six years after the agreement came into force. The Canada-United States -Mexico Agreement (CUSMA) must be renewed by July 1, 2026, and while that date is still two years away, CAF is beginning to prepare for this renewal process.
(United States Trade Representative, Katherine Tai)
Recently, US officials have warned that there is potential for substantial amendments, underlining that it will be important to protect key provisions under the agreement. Global Affairs Canada has begun to prepare for this review. Recent articles highlight the scope of this undertaking:
- Canada-U.S. trade is at an inflection point ahead of U.S. presidential election (Globe and Mail)
- U.S. trade czar: Don't get 'too comfortable' North American trade pact will stay as is
If past experience holds, two issues will be front and centre for the apparel and textile industries:
- TPL or Tariff Preference Levels. For the apparel sector, this provision allows companies to use limited quantities of imported yarn or textiles in garments and still qualify for free trade,
- Import prohibition on forced labour. The U.S. will likely press Canada to align our policies around imports more closely with US policies, especially the Uyghur Forced Labor Prevention Act.