Trade and investment among Canada, the United States and Mexico are a critical component of the North American partnership, and Canada’s trade ties with the two countries are broad, deep and evolving. According to the Government of Canada, in 2016, trade in goods and services between Canada and the United States averaged almost $2.3 billion per day, or $1.6 million per minute. Although lower in value, Canada–Mexico trade in goods and services is also significant. Many Canadian businesses, the workers who they employ and the communities in which they operate depend on access to North American markets, and the integrated value chains among the three countries.

With a focus on the future, and on ways to ensure continued economic growth, some of Canada’s trade policy initiatives and agreements – including the North American Free Trade Agreement (NAFTA) – need to be examined. Recognizing the potential for significant changes to North America’s trade and investment relationship, on 16 February 2017, the House of Commons Standing Committee on International Trade (the Committee) adopted a motion to undertake a study on the priorities of Canadian stakeholders having an interest in bilateral and trilateral trade in North America. In their appearance before the Committee, witnesses generally emphasized priorities relating to the NAFTA negotiations that are currently underway.

During the study, and especially during fact-finding missions to the United States, the Committee learned that there are many opportunities for Canadians to increase awareness among Americans of the significance of the Canada–U.S. trade relationship for their country’s economy. While engagement between representatives at the highest levels of the two countries’ federal governments is necessary, the Committee agrees that Canada must also raise awareness of its trade relationship with the United States among American legislators, voters, businesses and state governors.

Recognizing that the North American economic partnership involves three countries, the Committee believes that the NAFTA negotiations should remain trilateral, and focus on increasing the competitiveness of Canada, the United States and Mexico as a region. From a Canadian perspective, the negotiations should result in increased exports by Canada’s businesses, improvements for Canadian workers, and reduced income and wealth inequality in the country. In pursuing these objectives, Canada’s negotiators must be informed by ongoing consultations with Canadians, and with the country’s provinces/territories in an effort to ensure that the changes to NAFTA that are being negotiated meet the needs of all of Canada’s regions.

A number of witnesses emphasized that Canadian businesses depend on open and reliable access to markets in the other two NAFTA countries, and on their ability to participate in North American value chains. In the Committee’s view, as the NAFTA negotiations continue, the ability to sell into the U.S. and Mexican markets, and to participate in cross-border value chains, must be preserved.

Witnesses also made market access–related comments about supply management, and advocated support for Canada’s supply-managed sectors. In acknowledging the contribution of producers in these sectors to the country’s economy, the Committee believes that additional access to Canada’s market for imports of U.S. dairy and poultry products would negatively affect Canadian producers of these products, and potentially undermine the stability and viability of the country’s supply-management systems. Consequently, during the NAFTA negotiations, the Government of Canada must defend Canada’s supply-managed systems.

Similarly, a number of witnesses urged the Government of Canada to defend Canadian interests in other areas, specifically culture and intellectual property. Some highlighted the importance of NAFTA’s cultural exemption for Canada’s broadcasting and cultural sectors and supported its preservation during the NAFTA negotiations, which is a position with which the Committee agrees. As well, in recognizing the contributions that innovators make to Canada’s economy, and many Canadians’ reliance on access to innovative products and services, the Committee urges the Government of Canada to maintain its ability to ensure that Canada’s intellectual property regime balances the interests of rights holders and users, and to modernize this regime following domestic reviews.

While some witnesses emphasized the need to preserve Canada’s market access, a number also focused on increased access to international markets. According to them, this access could occur, for example, through new opportunities for Canadian businesses to obtain public procurement contracts in the United States, ongoing discussions aimed at resolving the softwood lumber dispute with the United States, and continued trade discussions among the 11 countries that are currently members of the Trans-Pacific Partnership. In the Committee’s opinion, in order for Canadian businesses – including small and medium-sized enterprises, women-owned businesses and firms in multicultural communities – to be prepared for enhanced opportunities, they must have access to trade-related training and be made aware of the range of federal trade-promotion services that are available to them.

NAFTA was implemented in the era before digital trade and e-commerce. With a view to the future, the Committee supports adding provisions in these areas to NAFTA in order to enable Canadian businesses to increase the extent to which they engage in this growing form of commerce. That said, the Committee also shares the view of witnesses who suggested that such provisions must not compromise the competitiveness of Canada’s “bricks and mortar” businesses, Canadians’ privacy rights or the security of their data.

Whether the focus is increased trade with NAFTA partners or with other countries, the Governments of Canada, the United States and Mexico can help businesses by addressing border-related and regulatory impediments. Witnesses mentioned border delays that negatively affect Canadian businesses that trade with the United States, and highlighted the need for modern border infrastructure and customs processes. In supporting these witnesses and those that commented on regulatory differences among the NAFTA countries, the Committee also urges increased regulatory cooperation to facilitate trade throughout North America while ensuring that public health, safety and security are protected. As well, businesses can be assisted if impediments to the movement of workers to other countries where their skills are needed are reduced. From that perspective, the Committee supports modernization of NAFTA’s list of professionals and skilled workers who are eligible for temporary entry.

Witnesses commented on the three chapters in NAFTA that address dispute settlement: 11, 19 and 20. The Committee is convinced that each NAFTA country must have recourse against any other NAFTA country that acts in a manner that is inconsistent with NAFTA, and that an impartial mechanism for reviewing anti-dumping and countervailing duties orders must exist. Accordingly, the dispute-settlement mechanisms contained in Chapters 19 and 20 of NAFTA must be retained. Regarding the investor–state dispute-settlement mechanism provided in Chapter 11, the Committee supports the view that panel decisions must respect governments’ rights to regulate in the public interest.

Finally, consistent with the priorities of some witnesses, the Committee believes that NAFTA must be broadened to address policy goals in relation to the environment, labour standards, gender equality and Indigenous peoples, and must include enforceable labour and environmental provisions. Believing that trade-related benefits must be shared among people, the Committee also feels that the Government of Canada must ensure that gender is an important consideration during the NAFTA negotiations, and that the rights of Indigenous peoples are respected, including through support for the principles of the United Nations Declaration on the Rights of Indigenous Peoples.