Final tweaks in North American trade deal keep lid on e-commerce

October 8, 2018 by
Nico Hoeijmans

CaUsMeLast-minute changes to the new North American trade deal sank USA's hopes of making Canada and Mexico allow higher-value shipments to the countries by online retailers, such as Amazon.com, a top Mexican official said on Friday according to Reuters. The revised pact was set to double the value of goods that could be imported without customs duties or taxes from the United States through shipping companies to Mexico.

Canada’s adoption of a more restrictive threshold during its efforts last month to salvage a trilateral deal prompted Mexican negotiators to follow Canada’s lead, Economy Minister Ildefonso Guajardo said on Friday. The final version of the trade agreement will insulate retailers in both countries from facing greater competition from e-commerce companies like Amazon.com Inc and eBay Inc. The change was coming last-minute that it was not written into the agreement published last weekend. The new deal, called the United States-Mexico-Canada Agreement (USMCA), was meant by U.S. President Donald Trump to create more jobs in the United States.

U.S. negotiators originally pushed Mexico and Canada to raise import limits to the U.S. level of $800 from current thresholds of $50 and C$20, respectively. Traditional retailers in Mexico opposed such a big hike, fearing online companies would sell cheaper imports from Asia through the United States. Even so, Mexico initially agreed in August to raise the threshold on customs duties and taxes to $100 in its bilateral deal with the United States.

The Retail Council of Canada said the deal will protect retailers against a “massive change in the competitive landscape.” Mexico decided to follow suit, Guajardo said, favoring local clothing, footwear and textile industries, as well as the finance ministry that collects duties and taxes.

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