China says it was targeted by one clause of USMCA deal

Unclear if provision about trading with a ‘nonmarket’ economy will have any teeth

OTTAWA— China says it deplores a controversial new clause in the United States-Mexico-Canada Agreement that calls on the countries to notify one another if they enter into trade talks with a “nonmarket” economy.

In a scathing statement, the Chinese Embassy in Ottawa says section 32.10 of the new USMCA amounts to an act of political dominance by the U.S., which it blames for inserting the clause some argue gives the Americans a veto over Canada and Mexico pursuing free trade with China.

The Trump administration has slapped tariffs on hundreds of billions of dollars worth of Chinese goods, prompting retaliation from Beijing.

While the clause in the new agreement with Canada and Mexico does not mention China specifically, the provision is being widely seen as an attempt to single out Beijing. It requires a USMCA member country to provide notice and information to the other two partners if it plans free trade talks with a “nonmarket” economy. It also gives the other partners a say in the text of such a deal.

China disputes that it is a nonmarket economy. “China firmly supports the multilateral trading system with the World Trade Organization (WTO) at its core and props up an open world economy,” Chinese Embassy spokesperson Yang Yundong said in a statement to The Canadian Press.

Derek Burney, a veteran of Canada’s continental trade wars, blames Peter Navarro, one of U.S. President Donald Trump’s top trade advisers, for pushing China considerations into the text of the USMCA.

Burney said he’s not convinced the clause has any teeth to prevent Canada from moving forward economically with China “as assertively” as possible.