Canada’s free-trade agreement with the U.S. has no free trade, nor is it an agreement

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Blayne Haggart is an associate professor of political science at Brock University. His latest book, with Natasha Tusikov, is The New Knowledge: Information, Data and the Remaking of Global Power (Routledge, 2023).

Canada is at a crossroads. Despite a temporary reprieve from U.S. President Donald Trump’s tariffs, the threat remains. We must confront the elephant in the room: the status of the Canada-United States-Mexico Agreement (CUSMA), which we are set to renegotiate next year.

The most important fact of the tariff standoff is that it happened at all, in direct contravention of the spirit and letter of CUSMA. Mr. Trump’s actions, sanctioned by his party, tell us the United States cannot be trusted to keep its word.

We have to ask: What is the point of CUSMA if it serves only to bind Canada and Mexico, but not the United States?

Treaties are central to international order. They are designed to provide certainty in relationships between countries. Countries can, for example, commit to guaranteeing reciprocal access to their markets. Normal trade agreements protect smaller partners from economic blackmail – as in, change this policy or we’ll cut off your access to our market.

But treaties only work when the signing countries trust each other. Unlike domestic laws, treaties are not backed by a supreme force. Each signatory has to believe the other will follow the rules, at least most of the time.

Absent a shared commitment to honouring their agreements, treaties can easily transform from tools for mutual co-operation into tools of coercion and domination. Negotiating treaties in which all recognize the rule of law is an exercise in a country’s sovereignty. Negotiating a treaty under conditions of domination is to surrender that sovereignty.

There is every reason to suspect that the United States intends to use the CUSMA renegotiations as a tool of domination in much the same way as Trump deploys the threat of (illegal) tariffs.

CUSMA itself (known as USMCA in the United States) offers a preview of the subjugation in store for Canada should we follow through with the scheduled renegotiation. The original text itself was designed to reduce Canadian and Mexican autonomy in ways that go far beyond trade. Article 32.10 effectively gives the United States a veto over its partners’ trade agreements with “non-market” countries (i.e., China) while Article 33.4 restricts their ability to set their own exchange-rate policies. None of these were on anyone’s radar during the CUSMA negotiations. Just imagine what other restrictions Mr. Trump might try to impose on Canada and Mexico.

Even worse, as went unremarked upon by most (but not all) at the time, CUSMA’s renegotiation clause eviscerated Canadian policy autonomy by removing the long-term protection provided by regular trade agreements. As everyone now recognizes, and as was an explicit objective of U.S. negotiators, renegotiation keeps the U.S. market-access stick on the table. This means they can credibly target any Canadian policy they don’t like, from current targets such as the Digital Services Tax to Canadian cultural policy and beyond.

And that’s just what’s legal. Mr. Trump’s tariffs themselves, shifting and absurd in their justifications, tell us exactly what he and his Republican Party think of treaties. With no actual fentanyl threat and relatively little illegal migration at the Canada border, let alone Mr. Trump’s subsequent professed concern for trade deficits, U.S. national-security concerns are not a justification; they’re a pretext. What Mr. Trump actually wants isn’t important. What matters is that the United States is acting against the spirit and the letter of a treaty it signed.

All this taken together shows CUSMA to be a weapon used by the United States to restrict Canadian economic and social policy, and to ensure we don’t even try, under penalty of economic pain, to either diversify or reinforce our own economy. It’s a cargo-cult agreement that ties us to the U.S. mast, offering only uncertainty and blackmail in return.

Unfortunately we have no easy solution in the near-term. Eighty per cent of Canadian exports go to the United States. Because of geography, the two countries will always be tied in some way.

But Canadians seem to be coming around to a consensus that Mr. Trump’s injection of toxic uncertainty into the North American relationship has transformed Canada-U.S. integration from a source of strength to our greatest weakness. Similarly, there seems to be a growing recognition that if we can no longer count on the United States, we must reinforce our domestic economy and diversify away from the United States.

We must build on this momentum, recognizing that the era of trade agreements is over. We need to concentrate on how to build a prosperous, democratic and independent Canada that’s fit for the world as it is, not as it was.