Canada: The Future Of The U.S.-Canada Trade Relationship In Light Of The Election

The United States and Canada enjoy a unique bilateral relationship. That relationship reflects a unique friendship, underpinned by shared geography, similar values, common interests, deep connections and powerful, multi-layered economic ties. The United States and Canada have both repeatedly confirmed their common commitment to strengthening the security of the border by working cooperatively to address threats early, facilitate trade, promote economic growth and jobs, integrate cross-border law enforcement, and bolster critical infrastructure and cybersecurity.

The recent election of Donald Trump creates uncertainty in the current trade and investment relationships between the United States and Canada. Although election promises don't always result in post-election action, given the conviction of President-elect Trump's promises and the anti-trade perspective of many of those who elected him, it can be expected that some action will be taken to further his international trade and investment promises.

Renegotiation of NAFTA

During the Presidential campaign, Mr. Trump declared that the North American Free Trade Agreement ("NAFTA") was a "disaster" that he would renegotiate or even abrogate. NAFTA has a termination clause that can be invoked upon six-month notice by the United States. It was within this context that Canada's Prime Minister, Justin Trudeau, unilaterally offered to renegotiate NAFTA just days after the election.

Since the Canada-United States Free Trade Agreement came into force in 1989 (followed by NAFTA in 1994), trade between the United States and Canada has more than tripled. It is currently estimated that nearly 9 million U.S. jobs depend on trade and investment with Canada, and approximately $2 billion worth of goods and services cross our borders each and every day.

Moreover, the labor mobility provisions of NAFTA have been used by companies on both sides of the border to facilitate the temporary entry of certain categories of workers, such as intra-company transferees and professionals. Today there are thousands of Canadians working in the United States, and thousands of Americans working in Canada because of NAFTA. Changes to NAFTA could have significant impacts on business immigration between our two countries.

Because NAFTA is a trilateral agreement, any renegotiation must include the United States, Canada and Mexico. While Canada has already confirmed its willingness to renegotiate NAFTA, that offer was made without consulting Mexico. It remains to be seen whether all three signatories are willing to renegotiate the trade agreement, and if so, the extent to which those renegotiations will transform NAFTA as we know it.

This creates uncertainty for all businesses that conduct trade throughout all of North America. The renegotiation of NAFTA could have a material impact on all companies whose supply chain includes North American cross-border transactions. If your business conducts any North American international trade, it is recommended that you carefully monitor the renegotiation of NAFTA.

The Softwood Lumber Dispute

Separate from the complex prospect of renegotiating NAFTA, several important bilateral trade issues vex the U.S.-Canada relationship — most importantly, the brewing dispute over softwood lumber. The lumber dispute is the most immediate Canada-United States bilateral trade issue that will require the attention of President-elect Trump.

Historically, the United States has imposed tariffs on imports of softwood lumber, including Canadian softwood imports. Canada accounts for approximately one third of softwood lumber purchased in the United States. The dispute dates back to 1982, when the U.S. lumber industry urged the U.S. Department of Commerce (DOC) to impose countervailing duties on imports of softwood lumber from Canada. After two additional countervailing duty investigations by the DOC, the United States and Canada reached a five-year trade agreement known as the Softwood Lumber Agreement (SLA). Since that time, the SLA has undergone a variety of iterations. At the same time, the DOC imposed further subsidy and antidumping rates on certain Canadian lumber companies, and there have been appeals of DOC cases to both the World Trade Organization panel and a NAFTA panel.

The SLA expired on October 12th, 2015. While both the United States and Canada have publicly confirmed the intention to negotiate a new SLA, lengthy and complicated negotiations have so far not resulted in a new agreement.

In early March 2016, Canadian Prime Minister Justin Trudeau and U.S. President Barack Obama instructed their respective trade officials to explore all options for solving the trade dispute. In June 2016, they released a joint statement promising to reach a new agreement on the softwood lumber issue. The statement hinted that Canadian exports would be held at or below an agreed U.S. market share. As the softwood lumber industry is vital to the Canadian economy, Canada has also promised to raise the issue before the World Trade Organization if an agreement is not reached.

On October 12th of this year, the temporary tariff agreement expired allowing U.S. industry to file a new antidumping and countervailing duty case against Canadian lumber. U.S. Trade Representative Michael Forman and Canadian Trade Minister Chrystia Freeland continue to negotiate, yet pessimism has shadowed the negotiations. Many observers expect new U.S. cases to be filed imminently.

The softwood lumber dispute will likely be the first significant trade negotiation between Prime Minister Trudeau's cabinet and the Trump administration. Not only will that negotiation address the historically acrimonious softwood issue, but it will symbolically set the tone for other trade disputes in the future. This heightens the importance of the softwood negotiation.

Future Implications

In short, upcoming trade negotiations on a new SLA, as well as the broader renegotiation of NAFTA, will have implications for businesses throughout the United States and Canada. Those negotiations will likely highlight difficult legal, political and economic problems that need to be navigated. Given the strong friendship between the United States and Canada, we remain optimistic that solutions can be achieved. Nevertheless, these issues highlight how these trade disputes are rapidly evolving and that ongoing vigilance with respect to developments is the prudent course for those conducting business between the United States and Canada.

This bulletin is a collaboration between the international trade group at Borden Ladner Gervais LLP and Scott Maberry and Lisa Mays at Sheppard Mullin Richter & Hampton LLP.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
McMillan LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
McMillan LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions