USMCA is in effect: now what?

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Pacific Northwest Region - July 2, 2020

u s small business administration
USMCA - a win for the American people, trade agreement creates new opportunities


The USMCA went into effect July 1. Here's what you need to know ... 


Why is this trade agreement important to small businesses in the Pacific Northwest?


Canada and Mexico are the U.S.’s largest trading partners. Plus, our region's shared border and proximity to Canada make the impact of the United States-Mexico-Canada Agreement (USMCA) substantial to small firms in the Pacific Northwest. Consider this:

  • The vast majority of companies that export goods from the Pacific Northwest are small firms - WA: 90% of companiesOR: 89%ID: 85%, AK: 73%).
  • In 2018, more than $17 billion in exports from the Pacific Northwest Region went to Canada and Mexico alone. 
  • From transportation equipment, electronic products and machinery to the region's coveted agricultural, fish, wood and food products, Pacific Northwest small businesses are selling what trade partners in Canada and Mexico want to buy.

Read more in this column 

 

How does the USMCA benefit small businesses specifically?


The USMCA contains a Small and Medium Enterprise (SME) chapter that for the first time in any U.S. trade agreement establishes a committee on small business issues. This provides a forum to advocate for small business interests on an international scale.

The USMCA also simplifies customs and trade rules; and, reduces barriers and costs that small businesses have historically faced including:

  • Cuts red tape at the border and encourages small business consideration when regulations are in development and implemented.
  • Supports the 21st century economy with strong digital trade detail supporting internet-enabled small businesses and e-commerce exports.
  • Promotes small business participation in government procurement, offering another way to grow their customer base and expand.
  • Protects innovators’ intellectual property.
  • Eliminates local presence requirements for cross-border service providers, benefitting small businesses by removing the burden of opening a foreign office to do business.

Review USMCA SME chapter

 

What steps can I take to benefit from the USMCA?


To fully leverage the new USMCA, here are a few actions small businesses can take now:

  1. Determine if your product is zero tariffs eligible or has expanded market access – zero tariffs remain from NAFTA; and, additional new and expanded market access has been achieved by the USMCA. Use the Free Trade Agreement (FTA) Tariff Tool for product-specific information.
  2. Consider STEP funding – check to see if your state participates in the SBA State Trade Expansion Program (STEP) and explore possible awards to help you expand trade, including internationalizing your website with translations and funding toward trade show costs.
  3. Access capital and get insurance – the SBA Office of International Trade loan programs can help you ramp up exports to Canada and Mexico. Additionally, insurance from the Export-Import Bank of the United States (EXIM) can provide peace of mind.
  4. Ask an expert – contact the SBA International Trade Ombudsman Hotline at (855) 722-4877 or international@sba.gov with questions. Or connect with an export adviser through the Small Business Development Center (SBDC) network.

Visit sba.gov/tradetools