“For the first time in a U.S. trade agreement, there is a dedicated chapter on Small and Medium-Sized Businesses (SMEs),” according to the Office of Small Business Advocate regarding the new trade agreement between the U.S., Mexico and Canada. The agreement will go into effect once Canada ratifies it, which both Mexico and the U.S. have already done.
The advocate’s office, an independent agency associated with the U.S. Small Business Administration, recently posted an article on its website detailing the benefits and provisions that could help small and medium-sized businesses compete internationally in North America.
The U.S., Mexico, Canada Agreement (USMCA) will replace NAFTA. As Assistant Chief Counsel Rosalyn Steward explained, the treaty has provisions specifically to help SMEs cut through the red tape in customs, raising de-minimis levels, and new informal trade levels (below $2,500) that come with reduced paperwork.
It also requires addressing small business issues regarding intellectual property, boosts government procurement opportunities, and eliminates the local presence requirement for cross border service providers.
“The chapter on SMEs promotes cooperation between the U.S., Canada and Mexico (the Parties) to increase SME trade and investment opportunities,” Steward writes. “It establishes information-sharing tools that will help SMEs better understand the benefits of the agreement, it also establishes a committee on SME issues that will be comprised of government officials from each country. The chapter creates a new framework for an ongoing SME dialogue that will enable SME participants to provide views and information to government officials on the implementation and further modernization of the agreement.”