New NAFTA potential for smaller shippers

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This article was originally published on July 21, 2017 in the online edition of the Journal of Commerce as well as in the subsequent print edition.

By Stéphan Galarneau, Vice President of Inside Sales for North America at Livingston International

When the office of the US Trade Representative (USTR) recently released its 18-page document outlining key objectives in the upcoming North American Free Trade Agreement (NAFTA) negotiations (now confirmed to begin August 16), most pundits rightly seized on the opportunity to focus on items like dispute resolution, rules of origin, supply chain management, and a number of other hot-button issues.

Yet among the objectives set forth in the document was the establishment of reforms that would allow small businesses to make better use of NAFTA. These included:

  • Secure commitment by NAFTA countries to provide information resources to help small businesses navigate FTA requirements for exporting to the NAFTA markets.
  • Cooperate on small- and medium-sized enterprise (SMEs) issues of mutual interest.
  • Establish an SME Committee to ensure that the needs of SMEs are considered as the Agreement is implemented in order for SMEs to benefit from new commercial opportunities.

While small business issues may not have been traditionally at the top of the priority list when it comes to trade agreements and may not be the focus of economists’ and policy wonks’ analyses, the inclusion of this text represents a critical and noteworthy pivot in the framing of trade policy and a positive one at that.

When evaluating SMEs and trade in North America, it is important to avoid speaking in homogenous terms. The disparity in the degree to which SMEs in Canada and the United States make use of trade opportunities is substantial and offers some explanation as to why it was the United States that initiated the discussion over making NAFTA more accessible to small business.