The Future of Business Recovery in North America USA and Canada

The future of Canada looks very different today than it did in 2019. The global epidemic has impacted nearly every aspect of daily life, from work, education, and health care to recreation, travel, and commerce. Simultaneously, long-standing priorities like as climate change, Indigenous reconciliation, housing, and health are becoming increasingly urgent. Canada's place in the globe is changing, as is our relationship with the United States. What initiatives can aid our country's recovery and ensure a successful future? The Globe and Mail and its partners will hold full-day conferences in June, September, and November 2022 to bring together national voices and define a new path for Canada in a changing world.

Join us on June 22 for the inaugural session in the series, where we will discuss the future of Canada's economy, our country's place in the globe, and the changes that lie ahead.

Now, more than ever, US companies like Otis rely on the predictability provided by the United States-Mexico-Canada Agreement (USMCA) to plan for the future. Business Roundtable members from many industries rely on the North American economy's stability and integration to fuel our competitiveness. To that end, Business Roundtable collaborated with all three governments, as well as CEOs from all three countries, to ensure the success of the USMCA discussions, and we continue to create strong bipartisan and stakeholder support for the agreement. The USMCA took effect when it was most needed. No one could have predicted how essential North America's strong and secure trade and investment connections would become when USMCA was signed and legislation implementing the pact passed the US Congress with historic bipartisan support. The USMCA took effect in July 2020, just a few months after the COVID-19 epidemic began. As supply chain disruptions from the pandemic and geopolitical strife worsened, the USMCA strengthened the North American economy and contributed to the resilience of all three countries. USMCA discussions and implementation activities strengthened trilateral government-to-government connections, allowing North America to handle these challenges as a unified front. The agreement also facilitated policy cooperation on long-term efforts to improve supply chain diversification and resilience. For example, through the innovative USMCA Competitiveness Committee, all three nations signed an agreement1 in February 2023 to better position North America to handle future supply chain challenges through increased coordination. 

USMCA partners invest, integrate, and innovate jointly.

The broad, bipartisan support for USMCA shows that the case for extensive free trade accords can still be made in the United States Congress. Furthermore, the increased trilateral trade and investment that has resulted from USMCA, as well as the North American Free Trade Agreement (NAFTA) that preceded it, suggest that trade accords should continue to be central to US international economic strategy. commerce between Canada and Mexico accounts for around 26% of total US commerce, more than any other trading bloc, and economic activity in North America continues to grow faster than US trade with the rest of the globe. From 2019, the final full year before the USMCA went into effect, to the first half of 2023, the United States' two-way trade in goods and services with Canada and Mexico increased by 28% to $1.8 trillion, exceeding the 21% growth in U.S. trade with the rest of the world over the same period. Investment ties have also become stronger. Between 2019 and 2022, US foreign investment in Canada and Mexico increased by 21% to $569 billion, while Canadian and Mexican investment in the US increased by 34% to $623 billion. As with the trading relationship, investment between the United States and our North American neighbors has surpassed U.S. external and inward investment when compared to the rest of the globe. In all three nations, USMCA is required to stimulate increased economic integration and the establishment of sectoral supply chain ecosystems in order to boost North American industrial competitiveness.

USMCA includes significant modifications to NAFTA in the chapters covering trade facilitation, digital trade, dispute settlement, regulatory practice, and market access, as well as stronger and more readily enforced labor and environmental requirements. 

However, the full benefits of the agreement will not be achieved unless all USMCA commitments are met and implemented. Furthermore, with all three countries having enacted and are currently implementing domestic manufacturing and supply chain programs, USMCA is required to incentivize further economic integration and the development of sectoral supply chain ecosystems in order to strengthen North American manufacturing competitiveness. In key sectors such as critical minerals, clean energy technologies, semiconductors, and pharmaceuticals, combining USMCA with domestic legislative and policy initiatives such as regulatory reforms to streamline project approvals, fiscal incentives to support technology modernization, and workforce development programs can hasten trilateral economic integration, innovation leadership, and job creation. Business leaders must continue to highlight the value of USMCA throughout the next elections in all three countries, as well as the agreement's first sunset review in 2026. In the face of continuous and growing global economic, climate, and technological upheavals, US global competitiveness, innovation leadership, and supply chain diversification initiatives are dependent on the framework for North American economic integration established by the USMCA. To maintain political and stakeholder support for the USMCA, corporate leaders and advocates must raise understanding about the scope and importance of North American trade, investment, and supply chain integration. Business Roundtable members will continue to work with their CEO counterparts in Mexico and Canada to promote the agreement's benefits to legislators and ensure a seamless extension in 2026.