Everyone has heard of free trade agreements. Most of us are familiar with NAFTA, and perhaps a little less so with its successor, CUSMA (USMCA/TMEC)—partly because of its multiple names, which can be confusing, even though CUSMA is largely a copy-and-paste version of NAFTA.

Lately, however, CUSMA sometimes feels a bit like the Strait of Hormuz: with all the abrupt and occasionally contradictory statements coming out of Washington, it's hard to tell whether it's open or closed—or perhaps somehow both at the same time.

CUSMA is currently set to remain in force until 2036, barring any major changes, with annual reviews along the way. Some products, however, are excluded from its preferential treatment—or, more accurately, continue to be subject to duties despite the agreement. Potash, steel, aluminum, automobiles, lumber, certain furniture products, and others may be affected, and the rules can change at any time. This has become the new "normal" in economic policy south of the border: forward or reverse, almost anything is possible at any moment.

And then there is Europe. Europe is far away and incredibly diverse: 24 official languages (and we already struggle enough with managing French and English!). It can all seem rather complicated. We occasionally hear about the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, but many businesses remain unsure of its practical benefits.

The agreement is regularly criticized in some quarters. Belgians debate it (particularly in Wallonia), as do Italians, especially among certain political groups that would prefer Italian pasta producers to use only Italian durum wheat rather than imported Canadian wheat, their traditional raw material. Then there is France, where the National Assembly approved CETA but opposition has emerged elsewhere in the legislative process. And what about the United Kingdom, which left the European Union through Brexit?

As for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), its very name suggests something ambitious and far-reaching. It opens the door to 11 Pacific-region countries, but for many Canadian businesses, those markets seem distant, exotic, and somewhat complex.

To make matters more complicated, some CPTPP member countries also have separate agreements with Canada, such as Mexico, Chile, and Peru. Canada is also negotiating with the Association of Southeast Asian Nations (ASEAN), a bloc of 10 Southeast Asian countries. Some ASEAN countries are CPTPP members, while others are not. For example, Canada recently concluded an agreement with Indonesia, which is an ASEAN member but not part of the CPTPP.

So how do businesses make sense of all this? With patience—and by surrounding themselves with the right advisors and specialists. Staying informed about developments in our globalized economy and the opportunities they create is essential.

Because free trade agreements are key drivers of international growth and success, Canadian businesses have little choice but to pay close attention to them. Doing so allows us to diversify our export markets and reduce our dependence on the U.S. market.

The primary advantage of these agreements is simple: our products can enter participating countries duty-free, making them more competitive. But the benefits work both ways. If we source raw materials, components, or parts from countries covered by these agreements, those inputs may also enter Canada duty-free. In some cases, this can make them more attractive than inputs sourced from countries such as China, where duties may apply upon importation into Canada.

Before concluding, it is worth highlighting two important points. First, taking advantage of the preferential tariff treatment available under a free trade agreement is neither mandatory nor automatic. It is a business decision. Second, if you choose to claim preferential treatment, you must ensure that your products meet the applicable rules of origin and that you can prove compliance at any time through proper supporting documentation.

Finally, while all of this may seem complicated at first, certain details can actually simplify matters. For example, if you export a product to one of the 27 European Union countries and it requires CE certification, did you know that some non-EU countries—such as Switzerland, Norway, and Türkiye—also recognize or use CE standards? That's one less regulatory hurdle to worry about.

Understanding how these agreements work is an excellent investment for Canadian SMEs. We sometimes assume that large multinationals have the advantage, but in many respects the opposite is true. Multinationals often manage global investments and long, highly complex supply chains. SMEs typically have shorter and more agile supply chains, allowing them to adapt more quickly and efficiently to changing circumstances.

For that reason alone, investing time and resources in understanding Canada's free trade agreements is well worth the effort.

Want to learn more? Join our next training session. 👉 Click here to register

© Christian Sivière, July 2026