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Prime Minister Crest

Deputy Prime Minister remarks on legislation to implement the new NAFTA at the Standing Committee on International Trade

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Thank you very much, Madam Chair.

Thank you as well, Members of the committee. I’ll make a few introductory remarks and then I will be happy to answer your questions.

I would like to acknowledge that we are gathered on the traditional territory of the Algonquin.

Let me start with very great pleasure by introducing the outstanding Canadian public servants who have accompanied me today, and without whom this pivotal new agreement would not have been possible.

  • Steve Verheul, Assistant Deputy Minister and Chief Trade Negotiator; and
  • Kirsten Hillman, Acting Ambassador of Canada to the United States.

Let me say that they lead an outstanding team of negotiators.

I am very pleased to speak today in support of Bill C-4, the Act to implement the new NAFTA, the Canada-United States-Mexico Agreement.

Canada is a trading nation. Indeed, with the world’s tenth-largest economy, trade is the backbone of our economy. Trade is vital for the continued prosperity of Canadian workers, entrepreneurs, businesses, and communities across the country

Our government champions an open, inclusive society and an open global economy. These fundamental Canadian values transcend party and region. In fact, each of Canada’s three, major trading agreements – CETA, CPTPP, and now the new NAFTA – were the outcome of efforts across party lines.

Canadians support free, fair, and balanced international trade, based on mutually agreed rules. These rules provide predictability and stability in how goods, services and investment are carried out between Canada and our major trading partners.

We have seen remarkable success in this area. In 1994, NAFTA created the largest free trade region in the world. In 2018, trilateral merchandise trade between US, Canada, and Mexico reached nearly US$1.2 trillion – a four-fold increase since 1993.

Today, the NAFTA region comprises almost 490 million consumers and has a combined GDP of more than 23.5 trillion U.S. dollars. Our three countries account for more than one-quarter of the world’s GDP, with less than seven percent of its population.

This record of growth is a tribute to all Canadians, to our entrepreneurs and workers across this country. Trade between the NAFTA partners has helped us build a continental network of supply chains across a range of industrial and agricultural sectors.

It has made Canada more competitive globally. It has created good jobs for Canadians and it has fostered job-creating direct investment between Canada and the United States.

The new NAFTA helps ensure we maintain this vital relationship and that we maintain predictability and stability in our commercial relationship with the United States, our closest and overwhelmingly our largest trading partner, and with Mexico.

The negotiations to modernize NAFTA were unprecedented in their intensity, scope and urgency. At the outset, we faced a barrage of protectionist trade actions from the United States, and the very real threat of a U.S. unilateral withdrawal from NAFTA altogether.

Team Canada stood firm and Team Canada stood united. Guided by strong support for free trade from Canadians across the country, at all orders of government and across the political spectrum, from businesses to labour leaders, to Indigenous leaders, we sought advice and consensus, and we acted in a united way.

I would like to particularly thank the NAFTA Council for its hard work. Together, we worked tirelessly to modernize NAFTA for the 21st century and extract further benefits for Canadians from a trading partnership that has been a model for the world.

And that is exactly what we accomplished.

The new NAFTA preserves Canada’s tariff-free access to the United States and Mexico. It restores and strengthens the predictability and stability of Canada’s access to our largest market. It does so in the face of rising protection, protectionist sentiment south of our border and around the world. 

And the new NAFTA modernizes and improves on the original agreement.

Allow me to highlight some of the key tangible benefits for Canadians.

First, this agreement protects two billion US dollars worth of daily cross-border goods and services trade between Canada and the United States. This means that 99.9 per cent of Canadian exports to the United States are eligible for tariff free trade.

The new NAFTA preserves crucial cross-border auto supply chains, and provides an incentive to produce vehicles in Canada.

The agreement also commits all partners to comply with stringent labour standards, and strengthens labour obligations to help level the playing field for Canadian workers. Mexico has also undertaken specific commitments to provide for the protection and effective recognition of the right to collective bargaining.

I would add that our government is working in collaboration with the Mexican government to help Mexico implement its labour reforms.

Throughout the negotiations, Canada was confronted with the American tariffs that were unprecedented, unjust, and arbitrary with respect to Canadian steel and aluminum. We were able to avoid an escalation without, however, backtracking. We stayed focused on defending Canadian workers, their families, and their communities.

We succeeded, and those U.S. tariffs have been lifted.

There was an additional U.S. threat to impose Section 232 tariffs on Canadian autos and auto parts. That threat was lifted on November 30, 2018, the day we signed the new NAFTA. As a result, Canada’s auto industry now has the stability to seek investment for further growth and innovation.

The new NAFTA also preserves elements of the original NAFTA that have been essential for Canada, which were under threat.

It maintains Chapter 29 regarding the dispute settlement mechanism for trade. This is a fair and impartial mechanism, which had been included in the original agreement thanks to the hard work accomplished by Canada. This mechanism has been beneficial for our forest sector workers well over the years, and has protected their jobs from unjust trade measures.

The new agreement preserves NAFTA’s cultural exception, which contributes to protecting more than 666,000 jobs in Canada’s cultural industries and is so pivotal to supporting the artists who tell our stories, in both official languages.

The new NAFTA maintains tariff-free access to the U.S. market for Canadian ranchers and grain farmers.

We should never lose sight of the fact that the U.S. starting objective in the NAFTA renegotiations was to abolish Canada’s system of supply management. We did not accept that. Instead, we stood up for Canadian farmers and preserved supply management for this generation and for those to come.

The agreement includes an enforceable environment chapter that requires NAFTA partners to maintain high levels of environmental protection, as well as ensuring sound environmental stewardship. In addition, it recognizes and supports the unique role of Indigenous peoples in safeguarding and preserving our environment.

The new NAFTA contains ambitious and enforceable labour obligations to protect workers from discrimination in the workplace, including on the basis of gender.

In conclusion, Madame Chair, the new NAFTA is good for continued economic growth and prosperity in Canada. It restores stability and predictability for our exporters – and for hundreds of thousands of Canadian workers. It allows us to put the uncertainty of recent years in the past.

Most importantly, the new NAFTA is pivotal in securing the future of good quality Canadian jobs across our country, as market access to the United States and Mexico is assured for years to come.

Thank you.

I would be happy to take your questions.