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Ahead of a March 23-24 visit to Canada by President Biden, a number of business organizations wrote to ask him to raise several longstanding trade irritants with the U.S.’ northern neighbor. While a White House announcement said the two sides would address topics such as defense cooperation, climate change, the Russia-Ukraine war, and regional challenges such as instability in Haiti, it also mentioned strengthening supply chain resilience, and other trade topics could find their way into the talks as well.
The March 20 letter emphasized the importance of the U.S.-Canada economic relationship and expressed concern that “Canada is pursuing a number of problematic proposals and actions that could significantly limit the ability of U.S. companies to export their goods and services and fairly compete in the Canadian market.” It also highlighted the importance of addressing these problems now so the U.S. and Canada can better work together on trade initiatives like the Indo-Pacific Economic Framework and the Americas Partnership for Economic Prosperity.
The letter cited several measures Canada is pursuing that could violate its obligations under the U.S.-Mexico-Canada Agreement.
– the Canadian Border Services Agency’s Assessment and Revenue Management project, which would require more complicated border processes and increase the customs formalities required for informal entries and could be implemented as soon as this October
– recent changes to Canada’s Customs Act that will require express carriers to take on new obligations and potential liabilities when delivering goods into Canada and could further disrupt supply chains and increase costs for traders of all sizes on both sides of the border
– Canada’s dairy tariff-rate quota policies, which the U.S. has argued unfairly limit U.S. producers’ access to TRQ allocations
The letter also urged discussions on enhancing regulatory compatibility, including risk-based approaches to the assessment of regulations and the development of specific risk assessments, which would “make an outsized impact relative to national approaches and would support further trade and investment in the North American economy.”
Further, the letter highlighted digital trade issues, including the continuing threat of “a discriminatory and retroactive digital services tax targeted at U.S. companies,” legislation that seeks to use extraterritorial regulatory agency actions to compel U.S. streaming services and social media platforms to fund and/or promote Canadian content, and a bill that “likely would require a narrow range of U.S. digital companies to pay Canadian news organizations and broadcasters for the right to display news stories, headlines, snippets, and links.”
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