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

By  Scott Maberry and Lisa Mays of Sheppard Mullin; and Vincent J. DeRose, Jennifer Radford, Greg Tereposky and Daniel Hohnstein of Borden Ladner Gervais LLP. Today's Global Trade Law Blog is brought to you by a collaboration between the international trade group at Sheppard Mullin and the team at Borden Ladner Gervais LLP (BLG).

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 cyber-security.

The recent election of Donald Trump creates uncertainty in the current trade and investment relationships between the United States and Canada. Although election promises do 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 nine 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 the 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 the NAFTA is a trilateral agreement, any renegotiation must include the United States, Canada and Mexico. While Canada has already confirmed its willingness to renegotiate the 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 the 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 the 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 12, 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 the 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.

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 Mondaq.com.

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

Events from this Firm
19 Oct 2017, Webinar, Los Angeles, United States

Please join Oliver Wyman and Sheppard Mullin for an upcoming webinar to discuss the critical topic of pharmacy value. "Driving Value in Pharmacy: How the Industry Can and Must Deliver Change" will highlight where the industry can and must evolve to bring needed relief to consumers and improve health.

19 Oct 2017, Webinar, Los Angeles, United States

Stay tuned on the latest developments in Europe that may affect your business and join Sheppard Mullin’s Antitrust & Competition “Breakfast with Europe” drive-time webinars, bringing you up to speed on what you need to know about the month back, the present and month forward in European competition law developments.

24 Oct 2017, Seminar, Los Angeles, United States

Presented by The American Bar Association White Collar Crime Committee.

In association with
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.