Energy provisions summary

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Agreement fact sheets

Provisions governing trade in energy goods, as well as other activities in the energy sector, will be found across the Canada-United States-Mexico Agreement (CUSMA) instead of in a dedicated chapter. This includes disciplines and provisions in the areas of national treatment and market access, rules of origin, customs and trade facilitation, cross-border trade in services and investment. Recognizing the importance of the energy sector in North America, CUSMA also contains an enforceable bilateral Canada-U.S. side letter on energy regulatory measures and regulatory transparency. The commitments, contained in an annex to the letter, will provide for enhanced regulatory transparency and cooperation in the North American energy sector and include disciplines with respect to access to electric transmission facilities and pipeline networks. CUSMA also resolves a technical issue related to diluents that had previously added upwards of $60 million a year in duties and other fees, which served as an unnecessary and burdensome cost to Canadian businesses.

CUSMA does not include the provision known as the “energy proportionality clause.” Under the original NAFTA energy proportionality clause, if Canada were to apply an export restriction on energy goods, it would have had to give the United States the opportunity to maintain a proportionate volume of Canadian supply, based on recent export levels. While this provision was never invoked, elimination of the proportionality clause in CUSMA reaffirms Canada’s sovereignty over its energy resources.

Technical summary of negotiated outcomes related to the energy sector

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