CUSMA Consultation

RE: Consulting Canadians on the operation of the Canada-United States-Mexico Agreement

On behalf of Canada’s 26,000 growers of pulses and special crops and 110 processors and exporters, please accept these comments on the importance of a 2026 extension of the Canada United States Mexico Agreement (CUSMA) and priorities for our sector.

A strong North American trading block, anchored by CUSMA, is critical for Canada’s pulse sector. Canadian growers and the pulse (e.g. peas, beans and lentils) and special crops (e.g. mustard, canary seed) value chains are well-positioned to supply the North American market, particularly with our integrated supply chains and North South transportation corridors. In 2023, the United States (US) was Canada’s third largest market for pulses and Mexico was one of our largest customers for beans. Canada and Mexico are the largest pulse markets for the United States.

CUSMA underpins this successful trade relationship. The 1989 Canada-US Free Trade Agreement and 1994 North American Free Trade Agreement (NAFTA) facilitated growth of the Canadian pulse sector through tariff elimination and CUSMA provides strong rules of trade and various cooperative mechanisms for information sharing, collaboration, and problem-solving. Canadian and American pulses move across borders and are handled and cleaned in our respective countries depending on end-use segment and geographic market. Canada and Mexico enjoy a strong trading relationship for beans. Additionally, CUSMA provides a platform to diversify markets through pulse-derived ingredients (i.e. protein, fibre and starch) and to capitalize on the growing global demand for plant-based protein.

Today, a strong CUSMA is particularly critical with ongoing geopolitical uncertainties and disruptions in key agriculture markets. The importance of market stability, particularly in North America, can’t be stressed enough. It ensures resilient agriculture systems, a vibrant US, Canadian and Mexican agriculture sector and strong service and ancillary sectors. The agreement is largely sound, and the Canadian government and industry stakeholders must continue to emphasize the positive value of the agreement to ensure continued political commitment from all 3 countries to ensure a key piece of our continental economic framework remains intact.

As such, a timely review must be a priority for Canada. Pulse Canada supports a larger Canadian strategy including federal and provincial advocacy, advance preparations and a cohesive approach to the 2026 review and extension. Advocacy, through a Team Canada approach, is key to build cross-border relationships and to promote the mutually beneficial trade relationship between Canada, the United States and Mexico and the role CUSMA (USMCA) plays in our North American economy and agriculture’s competitiveness globally.

It will also be important for Canada, the Unites States and Mexico to address irritants impacting the 2026 review. We are concerned with Bill C-282– An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management), currently before the Senate, and its direct impact on the CUSMA review and the US’s negotiating position. We have heard from past negotiators, on both sides of the border, that if in effect in 2019, a successful CUSMA would have been significantly more difficult.

Potential Enhancements

The 2026 review and extension provide an opportunity for Canada, the US and Mexico to discuss the future of the North American agriculture market and how it can be strengthened continentally and globally. The below enhancements would ensure farmers’ access to innovative production tools, create border efficiencies, foster growth in the North American plant-based protein market and support sustainable agriculture.

Innovation and trade facilitation

• Crop protection products: Responsible pesticide use is a key component of agriculture production and the sustainability of Canadian pulses and the larger North American crop sector. Continued regulatory harmonization of pesticide registration and maximum residue limits and adherence to science-based decision making is needed to facilitate trade and to ensure farmers access to innovation. Mexico’s proposed ban on glyphosate and aspects of California’s Prop 65 threaten farmer’s access to critical crop protection products, create risk for agriculture and agri-food exporters, and undermine science.

The North American Trilateral Technical Working Group on Pesticides is an integral forum to foster regulatory alignment and cooperation. Established under NAFTA, it was formed to address trade barriers, cooperate on joint reviews of new pesticides or re-evaluations of existing ones, and to share relevant science and data. The 2026 review provides an opportunity for higher ambition and a trilateral commitment to meaningful progress.

• Products of agriculture biotechnology: Section B: Agriculture Biotechnology of CUSMA’s agriculture chapter contains the most robust language on biotechnology in a Canadian free trade agreement. Pulse Canada supports Canada’s decision to join the US’ dispute settlement challenge of Mexico’s ban on GM corn in tortillas and dough, as a third party. The outcome of the challenge is particularly topical for the 2026 CUSMA review, and a ‘test’ of the Agriculture Biotechnology provisions and CUSMA’s larger objectives related to cooperation, international standards and science-based decision making.
  
  
• Enhanced cooperation. Enhanced communication between plant health regulators from Canada, the US and Mexico could streamline phytosanitary processes and requirements facilitating the movement of pulses and ensuring effective border administration. Canada continues to seek phytosanitary requirements for fava beans to Mexico and has historically experienced stringent testing and phytosanitary requirements. More largely, an electronic platform to exchange phytosanitary certificates within North America would strengthen and create more secure and efficient borders.
  
  
• Regulatory harmonization: As the Canadian and American plant-based protein sectors continue to grow, and dietary patterns and dietary recommendations evolve, it will be important to align and harmonize any changes to definitions and nomenclature, fortification requirements, food compositional standards, food labelling and nutrition claim regulations (particularly for protein content claims) in order to facilitate food industry innovation in response to changing diets while providing safe and nutritious foods.

Phytosanitary requirements

Pulse-derived ingredients

• Rules of origin: To qualify for preferential access, a product must result in “a change to heading 21.06 from any other chapter”. HS 2106, Miscellaneous Food Preparations – Food preparations not elsewhere specified or included, includes a variety of finished food products that don’t fit clearly into other categories. As many of the products using pea protein concentrate or texturized pea protein (HS 2106.10) as an ingredient are classified under 2106, imported pea protein doesn’t comply with CUSMA Rules of Origin despite being two different manufacturing processes and undergoing significant transformation in Canada. These products include plant-based meat products, some protein bars, plant-based milk and cheese. Whereas, to qualify under Canada’s Comprehensive Economic and Trade Agreement (CETA) with the European Union, HS 2016.10 and 2106.90 must result in a “change from any other subheading”. Additional flexibility afforded at the sub-heading level would better position Canadian and US producers to capitalize on the growing demand for the plant-based protein.

Sustainable Agriculture

• Environment: Canada is a world leader in sustainable agriculture and pulses are one of the most sustainable crops globally. Any updates to the Environment Chapter to include sustainable agriculture must recognize our position of strength, focus on cooperation and ensure sustainability measures don’t act as protectionist barriers and uphold CUSMA’s preamble and principles of national treatment. The Canadian Agri-Food Trade Alliance (CAFTA) has published Principles for Sustainable and Fair Trade in the Agri-food Sector to provide a structured approach for stakeholders to engage in discussions at the growing intersection between trade and environment.
• Global engagement: Article 3.3 of the Agriculture Chapter promotes cooperation at the World Trade Organization to increase transparency and to further disciplines related to market access, domestic support and export competition. Canada, the US, and Mexico should explore other avenues of cooperation particularly related to sustainable agriculture and the use of non-tariff measures to promote climate solutions.

In conclusion, we appreciate the opportunity to participate in this important consultation and are available to provide additional details as required.

Sincerely,

Greg Cherewyk
President
Pulse Canada