The Canadian Agri-Food Trade Alliance (CAFTA) is a coalition of national organizations advocating for a freer and fairer international trade environment for the agriculture and agri-food sector.

CAFTA represents the 90% of farmers, ranchers, producers, processors, and exporters who depend on trade. CAFTA's members include farmers, ranchers, processors, producers, and exporters from major trade sectors such as beef, pork, grains, oilseeds, sugar, pulses, soy, processed food, and life science industries.

Given that this is the second round of round of public consultations regarding CUSMA, our submission will repeat several of the points we made one year ago. We will begin with agri-food exporters’ analysis of the current situation.
Current Status of US Market Access for Canadian Agri-Food.

While the Canada-US trading relationship has faced elevated political uncertainty under the current administration, it is essential to underline that these risks have not materialized in the agri-food sector. Most Canadian exports continue to benefit from tariff-free access to the US market under CUSMA provisions applicable to qualifying agri-food products. Canada's current position is therefore favourable to that of other agri-food exporters who are facing tariffs when selling into the US market.

CAFTA and its members have sought to manage this political risk by increasing our level of engagement with US agri-food stakeholders and political actors. We have found the sector to be largely supportive of agri-food trade with Canada and of CUSMA as a stable framework for this trade.

The US agri-food sector, like ours, is largely export focussed. While not universally, and seldom publicly, given their own management of political risk, many in the sector tend to view Canadian agri-food imports as important inputs that enhance their global competitiveness. They recognize that Canada and the US produce food together and have built integrated supply chains over the years that it would be extremely costly to dismantle.

CAFTA thus believes that the US agri-food sector will remain a valuable ally in reinforcing to the US administration that imposing tariffs on Canadian agri-food would undermine shared economic interests.

It is increasingly evident that other sectors of Canada’s economy face heightened tariff exposure, as the US administration appears to view some sectors to be more strategic or related to national security. It is critical that the Government of Canada manages these US concerns in a way that avoids spillover effects – particularly the imposition of across-the-board tariffs on sectors such as agri-food to which the US has not accorded the same strategic priority.
We reaffirm the broad strategic points we outlined in the first round of consultations, which remain unchanged and continue to guide our priorities.

Benefits of CUSMA

Trade agreements have been vital in fostering close integration between the Canadian and US agricultural sectors and a strong, collaborative relationship with our American and Mexican partners. The Canada-US Free Trade Agreement of 1989, followed by NAFTA in 1994, then CUSMA in 2020, have dismantled most tariff and quota barriers to Canada-US-Mexico agricultural trade.

CUSMA has greatly benefited the health and resilience of our agricultural sectors, ensuring the continued availability of sustainably grown and produced agriculture and agri-food products across our continental trading block.

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For Canada-US agri-food trade, CUSMA benefits trade and investment for both countries through highly integrated supply chains. Each country both exports and imports a wide range of agricultural products with the other, reflecting complementary strengths in production, geographic proximity, seasonal availability, consumer demand, and similar regulatory frameworks. This reciprocal flow supports specialization, enhances supply chain efficiency, and expands market access for producers and consumers alike.

Examples of this complementary intra-industry trade including the movement of livestock, differentiated cuts of pork and beef, raw and processed grain and feed inputs and products, as well as many finished or semi-processed products, such as sugar-containing ingredients and food products.

Our supply chains are so deeply integrated that in essence, our countries are producing together, innovating together, and moving goods through a shared transportation network.

Tariff and Non-Tariff Barriers in the US

 

Notwithstanding the benefits of CUSMA, the US has maintained certain tariff and TRQ barriers and has continued to erect non-tariff barriers (NTBs) to Canadian agri-food products.

While most agricultural and food product exports to the US benefit from tariff-free and quota-free access, refined sugar and certain sugar containing products (SCPs) remain a notable exception. CUSMA delivered modest but important improvements to Canada’s TRQ access with two new TRQs for sugar and SCPs, yet many ingredients and end-use formulations remain restricted under historical WTO TRQs and challenges of quota enforcement have frequently hampered quota utilization. There may be practical opportunities through the CUSMA review to modernize and enhance TRQ access for Canada.

With respect to non-tariff barriers, an important example is the USDA publication of a final Product of USA beef labeling rule that adopts the most onerous standard in the world – namely that to qualify for the label meat must be derived from animals born, raised, slaughtered, and processed in the US – while failing to give meaningful consideration to other options that would have respected the high level of integration in our North American supply chains and food systems.

This rule fails to recognize the role cross-border live animal movement and integrated processing play in food security, regional markets and supply chains, and the economic viability of producers on both sides of the border.

At the sub-national level, California’s Prop 12 illustrates the risks and market effects imposed by state-level regulations – the measure requires that any pork meat sold within the state of California must meet housing requirements, restricting sales of pork in California in a manner that is not compliant with CUSMA. The imposition of trade affecting standards by sub national jurisdictions complicates enforcement of national trade commitments and creates costly market fragmentation.

To manage these NTBs, Ottawa should pursue focussed bilateral engagement with the U.S. to reduce misalignments and protect integrated supply chains. Practical steps include reviving the Regulatory Cooperation Council or an equivalent mechanism to address regulatory divergence and negotiate operational solutions to preserve market access and reduce the likelihood of disruptive, unilateral measures.​
 

SPS Obligations

CAFTA is a strong advocate for upholding the rules-based framework for trade that is enabled by CUSMA.
All parties to CUSMA have an obligation to ensure that regulatory measures are developed and implemented in accordance with the sanitary and phytosanitary (SPS) obligations of the agreement. Specifically, SPS measures must be based on scientific and risk-based principles, relevant international standards, and avoid creating unnecessary barriers to trade.

 

CAFTA has welcomed the Government of Canada’s decision to participate as a third party in the CUSMA Dispute Settlement Panel Proceedings in which the US is challenging Mexico’s ban on the use of biotech corn in tortillas or dough. We consider the CUSMA Review to be an important opportunity to re-affirm the need for science and evidence-based decision making.

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Broader Security, Border and Trade Relationships

The joint CUSMA review provides an opportunity to develop a forward-looking agenda on what the three countries can do to strengthen North American competitiveness, build more secure and resilient supply chains, and further develop North America as a source of investment stability and strength.

In an increasingly uncertain international environment, Canada’s ties with its US and Mexican neighbours and partners require deliberate maintenance through joint planning, aligned systems and processes and sustained diplomatic engagement. Our security relationship, border management and the management of key trade infrastructure cannot be separated from the trading relationship. As a country, we must manage North American relations holistically.

 

Mexico
We welcome the Government of Canada’s efforts to strengthen relations with Mexico in the run up to the CUSMA Review. In our opinion, a durable trilateral agreement is in the interest of the three countries given our shared continental geography and the integrated supply chains we have built up accordingly. It is normal in a trilateral negotiation for discussions to be bilateral at times, trilateral at others. However, Canada should continue to pursue a trilateral agreement, because such an outcome protects market access, regulatory coherence and regional competitiveness, all of which is in Canada’s national interest.

Government Engagement with Agri-Food Exporters

 

Structured, ongoing engagement between the government and Canada’s agri-food exporters will be essential to ensure that stakeholder voices are heard as the CUSMA Review approaches. CAFTA would suggest following a model similar to the Indo-Pacific Agriculture and Agri-Food Office Working Group, which is co-hosted by AAFC and our organization. The Working Group has ensured regular opportunities to be in contact, maintaining open lines of communication and improving alignment between government and our sector.

 

Team Canada Approach

 

CAFTA supports a Team Canada strategy of coordinated outreach and engagement with key US and Mexican political and business leaders. CAFTA members can play a useful role in the Team Canada approach by working with their US and Mexican counterparts to underline the importance of CUSMA to them.

We note in this regard that CAFTA and its members attended the October 14 meetings in Mexico City with Minister MacDonald, as well as the Tri-National Accord meetings of provincial and state Ministers of Agriculture October 18-19 in Morelia, Mexico.

We thank Global Affairs Canada for the opportunity to present our views. We stand ready to support continued trilateral cooperation, targeted industry‑government engagement, and practical, operational solutions that protect and enhance North American agri‑food integration.

Michael Harvey
Executive Director