U.S.-Mexico-Canada Agreement Enters Into Force


U.S.-Mexico-Canada Agreement Enters Into Force

USMCA On July 1, the U.S.-Mexico-Canada Agreement entered into force, officially replacing the North American Free Trade Agreement. USMCA is the first trade agreement ever to include a full chapter dedicated to small business interests.

The modernization of trade with Mexico and Canada under USMCA is designed to benefit U.S. small businesses. It will also ensure more balanced trade. U.S. companies with fewer than 500 employees comprise 65 to 70 percent of all identified U.S. companies trading goods with our closest neighbors, according to the most recent statistics.

Companies selling goods to Mexico and Canada can now achieve expanded export opportunities under the USMCA. In 2019, U.S. companies sold $292.6 billion in U.S. goods to Canada and $256.5 billion in U.S. goods to Mexico.

As part of USMCA, SBA’s Office of International Trade launched a new international sales information resource site, sba.gov/tradetools, which is part of trade.gov/usmca to assist small businesses to use USMCA. Both links also connect to pages created by Mexico and Canada. Small businesses can explore the agreement, learn about the rules, and also identify where to direct questions and find resources through these information sharing platforms. Resources include a new Customs and Border Protection’s USMCA Center with a staff of experts.

As small businesses use the USMCA, they will find important commitments across the agreement, including:

    • The Small and Medium-Sized Enterprise Chapter creates a SME Dialogue to consider small business trade opportunities and challenges across the three countries. This is an important innovation to further ensure U.S. small businesses will continue to be heard and considered.
    • The USMCA Cross-Border Trade in Services Chapter enhances market access.  U.S. small business services can now have market access across North America without requirements for a foreign office or foreign representative.
    • The Customs and Trade Facilitation Chapter increases certainty. It provides for advance rulings commitments with expanded scope and a free, publicly accessible websites for advance rulings.
    • To decrease unintended trade costs, this chapter also provides procedures to correct errors.
    • To support small e-commerce sellers shipping with express services, Canada has raised its de minimis level for North American express shipments for the first time in decades. This doubles it from $C20 to $C40 for taxes.
    • Canada will also provide for duty free shipments up to $C150.
    • Mexico will continue to provide tax free treatment for shipments up to $US50. It will also provide duty free treatment for shipments up to US$117.
  • The Good Regulatory Practices Chapter, a first in a U.S. trade agreement, specifically includes provisions encouraging the parties to take into consideration the effects on small businesses in the development and implementation of regulations. The USMCA’s prioritization of small business traders will increase small business friendly ecosystems in North America and facilitate more trade.

To learn more, visit sba.gov/tradetools.