Small Business Trends printed an article highlighting the pros and cons for small businesses in the new US-Canada-Mexico deal. To be clear, the current agreement will most likely see further changes, but for now here are a few thoughts on the document as it stands today.
For starters, the competition against China is increased within the North American agreement. According to David Reischer is the CEO and Founder at LegalAdvice.com, “Section 32, restricts members of the deal (Canada, Mexico and the United States) from negotiating trades deals with non market countries like China.” This means that the focal point of isolating China and reaffirming the protection of American businesses is at the forefront.
Despite the antagonist nature against China, other Asian markets are not touched. “The important take away for small business owners such as myself is that there is no disruption of the relationship between other Asian and Pacific countries such as the Philippines and India.” Reischer explained.
In keeping with manufacturing, wages are set to increase. According to Nate Masterson is the CEO of Maple Holistics.. “By 2020, 30% of people working on cars in between the countries must be earning $16 per hour.”
With auto companies restructuring their businesses this could mean less employees at hire wages. This could also mean that the cost of a vehicle will increase as well, but it is too soon to tell as automakers are still in the middle of their restructure.
In looking at the agricultural market, it appears to be great news as, “Under the new deal, a certain Canadian pricing class for domestic milk will be done away with and American dairy farmers get an extra 3.6% more accessibility to Canadian markets.”
Michelle Klieger, the president of Stratagerm Consulting, also adds that “Canada is a big market for American winemakers to the tune of $1.1 billion in sales last year.” It appears that every farmer that stuck with the tarriff hit for 2018 will finally be rewarded in the near future (the cynic in me would also like to point out that this portion of the trade deal was offered by Canada to the USA before the tariffs hit.)
There are many other benefits including a big push to have items created in North America, mandating a higher percentage be allocated for a product to be considered North American made.