The Canadian Construction Association (CCA) has provided an assessment of the impacts on the construction industry of the new US Mexico Canada Agreement (USMCA), which will replace the existing North America Free Trade Agreement (NAFTA) in either late 2019 or 2020.
Here are the agreement’s impacts, as relayed in a CCA statement:
A point of contention during the USMCA negotiations were the existing tariffs on steel and aluminum; key materials used in most projects. The 25 percent tariff on steel, the 10 percent on aluminum, and prices of these products remain intact under Section 232. President Trump has called for an import quota if the U.S. government removes the tariffs. The Government of Canada officials have been vague about when or if the tariffs will be removed, and CCA will continue to engage with the government to find a solution and has been vocal about not introducing safeguards.
Buy America/Buy American
During the trade negotiations, the Canadian government sought a procurement process for Canadian businesses so that they would be able to participate in U.S. sub-federal infrastructure projects. Unfortunately, they didn’t succeed, and the stipulations within the Buy America/Buy American Acts mean that only US companies can bid on those projects. This is unfortunate for the construction sector that could have grown the procurement market as was the case with the Comprehensive Economic and Trade Agreement (CETA) with the European Union.
Ease of trade for construction supplies
The original NAFTA eliminated almost all tariffs between the three countries, and the USMCA maintains these benefits. It does however, include a new Customs Administration and Trade Facilitation Chapter which will standardize and modernize customs procedures to facilitate the free flow of goods.
Overall, the USMCA keeps business as usual for the Canadian construction sector. Despite not gaining access to sub-federal procurement and the continued tariffs on steel and aluminum, companies should not be affected by small changes in the agreement.
“CCA is proud to be supported by its 20,000 members and will continue to defend the industry’s best interests,” the CCA statement said. Further information is available Rodrique Gilbert, the CCA’s vice-president of public affairs, at (613) 236-9455 ext. 432 or by email at firstname.lastname@example.org or 613-236-9455, ext. 432.