Many businesses around the country are suffering due to the economic impacts from the coronavirus (COVID-19). Small businesses are especially being hit hard, with thousands in survival mode.
However, there may be some light at the end of the tunnel. For example, the Small Business Association (SBA) is offering loans and other debt relief, as well as many helpful resources for small businesses. And the $2 trillion stimulus package that Congress approved includes financial aid and support for small businesses.
Additionally, the U.S.-Mexico-Canada Agreement (USMCA), was formally ratified in March 2020 and once implemented (hopefully this summer), it will create opportunities for countless small businesses who already trade with—or who are planning to start trading with—Canada and Mexico. That’s because the USMCA will streamline trade between the three countries by adopting new customs procedures such as increasing Mexico and Canada’s de minimis, e-signatures, self-certification of origin, and other measures. It will boost e-commerce and the digital economy by ensuring that data moves freely across borders and that the localization of data is prohibited. The USMCA also contains strong protections for intellectual property rights, including enforcement tools to guard against counterfeiting and piracy.
As a reminder, the USMCA will replace the 25-year-old North American Free Trade Agreement (NAFTA). The deal was ratified by the Mexican legislature in June 2019 and by U.S. Congress in January 2020, and it was passed by the Parliament of Canada right before Canada’s five-week shutdown in response to COVID-19.
Unfortunately, COVID-19 may delay the agreement’s June implementation goal as the world deals with the global pandemic and looks toward economic recovery. In the meantime, small businesses should utilize the resources available to them (mentioned above) and as discussed in our previous blog, they should review their e-commerce capabilities to take advantage of many customers around the world relying on online shopping.
The current COVID-19 situation is also highlighting how relations between Canada, Mexico and the U.S. are more important than ever as more companies are turning to nearshoring in an effort to leverage trade opportunities closer to home as opposed to overseas. The ease of collaboration, proximity for travel, and minimal time-zone difference and cultural discrepancies will make the North American countries critical partners during these uncertain times and beyond.
At DHL, we are closely monitoring the COVID-19 situation and will continue to provide updates on how our customers could be impacted, including USMCA implementation news.
What is your business doing to prepare for the USMCA implementation and how can DHL help? Let us know on Twitter @DHLUS.