US liquor ban, ‘Buy Canadian’ policy flagged by US as trade irritants: report
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Provincial laws on alcohol and the federal government’s “Buy Canadian” policy have been flagged in a new report that outlines trade irritants between Canada and the US.
An annual document prepared by the Office of the United States Trade Representative said market access barriers imposed by provincial liquor control boards “significantly hamper” the export of US wine, beer and spirits to Canada.
Several Canadian provinces pulled American alcohol off the shelves last year after US President Donald Trump imposed tariffs, and the document said the US wanted its alcohol back “immediately and permanently” in all markets.
The document also raised concerns about the federal government’s “Buy Canada” procurement policy, which aims to ensure that Canadian products and workers are prioritized in contracts worth $25 million or more.
The report says American companies have reported concerns about barriers to competing for contracts, including being forced to share information about their boards of directors or prove their Canadian subsidiary’s independence from its American parent company.
Other issues listed in the report include delays in airline certification in Canada and higher costs for US dairy products.
The report said US imports above quota levels are subject to “very high tariffs,” including 245 percent for cheese and 298 percent for butter.
The report said U.S. goods exports to Canada will be $336.5 billion in 2025, down nearly 4 percent from 2024. He also said that Canada was the US’s second largest market last year.
Trade negotiations are failing
Trade talks with Canada ahead of a mandatory review of the continental trade deal have lagged behind those with Mexico, US Trade Representative Jamieson Greer said last month.
Greer told Fox Business that talks are moving forward with his Mexican counterparts as the Trump administration negotiates changes to the Canada-US-Mexico Free Trade Agreement, better known as CUSMA.
CUSMA — negotiated during the first Trump administration to replace the North American Free Trade Agreement — shielded Canada and Mexico from the worst effects of Trump’s tariffs. His 10 percent worldwide duty does not apply to goods subject to a trade agreement.
In the first high-level trade meeting since US President Donald Trump canceled talks with Canada in October, Canada-US Trade Minister Dominic LeBlanc met with US Trade Representative Jamieson Greer in Washington on Friday. CBC’s Kate McKenna reports on the few details we’ve got about the meeting, and Justin Trudeau’s deputy prime minister Brian Clow previews what to expect from CUSMA’s talks with Trump this month. Also, Oregon Attorney General Dan Rayfield led one of the cases that saw the US Supreme Court strike down Trump’s sweeping tariffs, and he explains his argument as he leads a 24-state lawsuit against the tariffs that Trump used to replace them.
Canada is still reeling from Trump’s various tariffs on industries such as steel, aluminum, cars, lumber and cabinets.
The Trump administration has launched an investigation under Section 301 of the Trade Act of 1974 of a long list of countries, including Canada, citing forced labor in supply chains. It was seen as a move to roll back Trump’s higher tariffs following a US Supreme Court ruling that limited the president’s tax powers.
The report on foreign trade barriers said that although Canada has taken measures aimed at stopping the importation of products produced using forced labor, “it does not appear that Canada is enforcing the ban on the importation of forced labor, which means that goods made by forced labor cannot enter and compete in the Canadian market.”
“This issue may unduly suppress costs, including labor costs, which may give certain goods originating in and within Canada an unfair advantage,” the report said.
Greer complained that Canadians maintain barriers that make it difficult to hold bilateral trade talks, citing the province’s ban on US alcohol.
Relations between Canada and the United States have been strained during Trump’s second administration with the president’s tariffs and impeachment threats.
CUSMA’s future in limbo
CUSMA will be reviewed this year but the future of the continental trade deal has been left in doubt by Trump. He called CUSMA useless and said it may have served its purpose.
Greer also floated the idea of abandoning the trade deal in favor of two separate bilateral agreements with America’s closest neighbors.
The CUSMA review sets up a three-way choice for each country to make in July. They can renew the deal for another 16 years, withdraw from it or signal both non-renewal and non-renewal – which would trigger an annual review that could keep negotiations going for a decade.
Ottawa and Mexico City both say the priority is to keep the agreement between the three countries.
LeBlanc led a major trade mission in Mexico last month and a Mexican trade delegation is expected to travel to Canada in May.
