By: S. George Alfonso, Of Counsel, Braumiller Law Group

The enactment of the “United States Mexico Canada Trade Agreement” (“USMCA”) on July 1st, 2020, heralded the first new tri-lateral trade agreement since the enactment of its predecessor, NAFTA in 1994.

Chapter 25 and the Newly Established Open Lines of Communication:

One of the most progressive and imaginative Chapters of the USMCA, which simply did not exist in NAFTA, is Chapter 25 “Small and Medium-Sized Enterprises”.

This Chapter creates the ability of “Small and Medium-Sized Enterprises” (“SME(s)”), to open up lines of communication and interact directly with the standing USMCA committee comprised of trade representatives of the “Three Nations” (“The SME Committee”).

The Authority of the Committee:

Chapter 25 provides in part that The SME Committee:

Shall convene a Trilateral SME Dialogue (the “SME Dialogue”)  [… which] may include private sector, employees, non-government organizations, academic experts, SMEs owned by diverse and under-represented groups, and other stakeholders from each [of the Three Nations][…]

SME Dialogue participants may provide views to the Committee on any matter within the scope of this Agreement and on the implementation and further modernization of this Agreement.

SME Dialogue participants may provide relevant technical, scientific, or other information to the Committee.

(Article 25.5: SME Dialogue);

The SME Committee may at any time, seek to collaborate with appropriate experts and international donor organizations in carrying out its programs and activities.  Those programs and activities include a broad range of subject matter regarding the following:

  1. Identifying ways to assist SMEs within the Three Nations in order to take advantage of the commercial opportunities resulting from the USMCA and strengthen SME competitiveness;
  2. Identifying and recommending ways for further cooperation between the Three Nations in order to develop and enhance partnerships between SMEs;
  3. Facilitating the exchange and discuss each Nation’s experiences and best practices in supporting and assisting SME exporters with respect to, among other things, training programs, trade education, trade finance, trade missions, trade facilitation, digital trade, identifying commercial partners in the territories of the Parties, and establishing good business credentials;
  4. Developing and promoting seminars, workshops, webinars, or other activities to inform SMEs of the benefits available to them under the USMCA;
  5. Exploring opportunities to facilitate each Nations’ work in developing and enhancing SME export counseling, assistance, and training programs;
  6. Recommending additional information that a Nation may include on the website referred to in Article 25.3 (Information Sharing);
  7. Reviewing and coordinating work programs with other USCMA committees and  bodies established under the USMCA, om order to improve the ability of SMEs to engage in trade and investment opportunities;
  8. Collaboration with other USMCA committees in order to consider SME-related commitments and activities into their work;
  9. Reviewing the implementation and operation of Chapter 25 and the reporting of findings and recommendations to the Commission that can be included in future work and SME assistance programs as appropriate;
  10. Facilitation and development of programs to assist SMEs to participate and integrate effectively into the Three Nations’ regional and global supply chains;
  11. Promotion of the participation of SMEs in digital trade in order to take advantage of the opportunities in the USMCA and rapidly access new markets;
  12. Facilitation and exchange of information on entrepreneurship education programs for youth and under-represented groups to promote the entrepreneurial environment in the territories of the Three Nations;
  13. Submission on an annual basis, unless the Parties decide otherwise, a report of its activities and make appropriate recommendations to the Commission; and
  14. The consideration of any other matter pertaining to SMEs as the SME Committee may decide, including issues raised by SMEs regarding their ability to benefit from the USMCA.

(Article 25.4: Committee on SME Issues);

The SME Committee’s Charge in Working with SMEs:

Chapter 25 seeks to create “[M]ore robust cooperation between the [Three Nations] in order to enhance the commercial opportunities for SMEs.”  Chapter 25 makes clear the charge to the SME Committee is extremely broad, including:

  1. The promotion and cooperation between SME business support infrastructure, including dedicated SME centers, incubators and accelerators, export assistance centers, and other centers as appropriate, to create an international network for sharing best practices, exchanging market research, and promoting SME participation in international trade, as well as business growth in local markets;
  2. Strengthening [the] collaboration with the [Three Nations] to promote SMEs owned by under-represented groups, including women, indigenous peoples, youth and minorities, as well as start-ups, agricultural and rural SMEs, and promote partnership among these SMEs and their participation in international trade;
  3. Enhance cooperation with the [Three Nations] to exchange information and best practices in areas including improving SME access to capital and credit, SME participation in covered government procurement opportunities, and helping SMEs adapt to changing market conditions; and
  4. Encourage participation in platforms, such as web-based, for business entrepreneurs and counselors to share information and best practices to help SMEs link with international suppliers, buyers, and other potential business partners.

(Article 25.2: Cooperation to Increase Trade and Investment Opportunities for SMEs);

“First Mover Advantage” in Working with the SME Committee:

The enactment of the USMCA, and in particular Chapter 25, provides an immediate and unique opportunity for companies engaged in international trade between the Three Nations to enhance their respective business opportunities in the immediate future through direct engagement with The SME Committee.

To fully utilize the potential benefits of Chapter 25, your international business should seek the talent and skill of both a lobbying firm with decades of international trade experience that also enjoys an established long-term relationship and resources of an international trade law firm.

Reigncore, LLC (“Reigncore”), is a Dallas and D.C. based lobbying firm which focuses on international trade.  Reigncore has an established relationship with Braumiller Law Group, PLLC (“Braumiller”), an international trade law firm with offices in Dallas, Chicago, Detroit, Toledo, Los Angeles, San Francisco, and Mexico.  Together in conjunction with Braumiller, Reigncore can not only provide the necessary consulting services required in order to explore and provide our company with the unique First Mover Advantage in working in an ongoing basis with The SME Committee, but can, through its working relationship with Braumiller, provide each client the elite international trade legal expertise necessary to fully maximize your company’s presence and obtain its desired goals in working with The SME Committee.  Such ongoing efforts in this new arena may very well prove vital to your company’s ongoing and increasing success under the USMCA.

For more information regarding how Reigncore can work with your business in maximizing the potential for direct First Mover Advantages in working with The SME Committee, please contact S. George Alfonso, President of Reigncore at SGeorge@Reigncore.com or [(O) 972-752-8330 / (O) 202-349-1111/ (M) 214-878-2390].