How SMEs Can Take Advantage of the USMCA
The USMCA has finally prioritized SMEs, with an entire section dedicated to small business traders' difficulties and needs. Here's how SMEs can benefit from the agreement.
It has been two years since the United States-Mexico-Canada Agreement (USMCA) went into force. A dynamic free trade agreement that replaced the North American Free Trade Agreement (NAFTA), the USMCA was engineered to boost the cross-border flow of goods and services by simplifying regulations, streamlining customs processes, and directly assisting traders.
What Makes the USMCA Unique?
For the first time, the USMCA has put the trade interests of small and medium-sized enterprises (SMEs) front and center. Specifically, the agreement is the first to include an entire section – Chapter 25 – dedicated to the challenges and needs of small business traders.
In addition, the USMCA contains multiple provisions that target the barriers that have historically confronted smaller companies as they move to compete on a global stage. Ultimately, the agreement will create a dynamic – yet predictable– trade environment for SMEs.
The fact is, Mexico and Canada are among the most critical trade partners for U.S. companies. Trade with the two nations reached a combined level of nearly $1.2 trillion in 2019, and according to the U.S. Department of Commerce, more than one-third of U.S. merchandise exports go to neighboring countries.
Chapter 25: Designed for Small Businesses
By committing the U.S., Mexico, and Canada to finance-dedicated export assistance centers and other small business support programs, Chapter 25 aims to directly empower SMEs to engage in cross-border trade. The chapter also includes provisions requiring that each country explore initiatives to improve access to capital and credit for SMEs, and it promotes the active exchange of information and best practices.
Critically, the USMCA also creates a Committee on SME issues to allow for ongoing collaboration and communication, and it establishes the SME Dialogue, a group created to allow government agencies and the business community to work together to improve SME trade.
Meanwhile, Chapter 25 recognizes the fundamental role of SMEs in the North American economy as well. It is very important for SMEs to carefully review all of the USMCA, not just the mechanisms set forth in Chapter 25, in order to understand how the agreement can increase trade and investment for SMEs across the North American region. This is especially true given the significant impact SMEs can have on the broader economy. Also, it is important for SMEs to understand their position as stakeholders in the SME Dialogue and become active participants in the implementation and further modernization of the USMCA.
Work with Export Portal
Export Portal strives to help startups and SMEs succeed in the competitive trading world. By working with us, you’ll receive help from experts in the industry who will guide you through the online export compliance process. Join us today!
Comments 0