Buried behind the cows and cars: key changes in NAFTA 2.0

While workers and consumers alike will be affected by the changes coming for Canada’s automotive and agriculture sectors, plenty of other things in the revised North American trade agreement will affect Canadians.

Here’s a quick look at some of what’s new in the U.S.–Mexico–Canada Agreement (USMCA):

Rising drug costs

The intellectual property chapter includes an extension of the length of time new biologic drugs will be protected from generic drug competition — up two years, from Canada’s previously agreed-upon eight years, to 10 years of exclusivity.

The U.S. was pushing Canada and Mexico to give 12 years of protection, so it’s a compromise. Key congressional voices wanted to see a win for the pharmaceutical industry to help secure their votes.

But down the road, Canadians will pay more for biologic drugs. It’s a problem future governments will face in about a decade, compounding existing pressures over rising drug costs at a time when the Canadian population is aging.

Copyright extensions

Copyright terms in Canada now extend for 50 years beyond the year the creator of the work dies. But the U.S. and the European Union have longer terms: 70 years after the creator’s death.

The USMCA will bring Canada’s copyright terms in line with the U.S. and Europe.

That might be good news for the estates of creators, but it will increase costs for those who use these works.

Buy America remains

One of Canada’s key objectives for the renegotiation of NAFTA was opening subnational (state and municipal) procurement in the U.S., so Canadian businesses could compete for more government contracts.

Opening up government procurement was one of the most significant accomplishments in Canada’s trade deal with the European Union. It holds promise for both goods manufacturers but also service providers — including small- and medium-sized businesses.

The Americans would concede no such win for Canada in this negotiation. “Buy American” rules that block cross-border procurement appear untouched by the language in this deal.

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