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How New USMCA, China Trade Deals Might Impact Maine

Seafood is Maine's top export, and it's mostly lobster. The Maine International Trade Center says 14% of these exports go to China. (Gary Cassel/Pixabay)
Seafood is Maine's top export, and it's mostly lobster. The Maine International Trade Center says 14% of these exports go to China. (Gary Cassel/Pixabay)
January 31, 2020

PORTLAND, Maine - President Donald Trump signed the United States/Mexico/Canada Agreement this week - and it could have some impact on Maine as Canada's neighbor.

While much of the new agreement is similar to the former treaty known as the North America Free Trade Agreement or NAFTA, one big change is that Canadians can now buy up to CA$150 worth of American goods online without paying duties, or import taxes.

This is much more than the CA$20 limit allowed in NAFTA. Wade Merritt, president of the Maine International Trade Center, says this could be significant for Maine.

"As a border state, we receive a lot of Canadian tourists in Maine," says Merritt. "And this is something that we've been keeping an eye on for a while, because there's a disparity between what Americans can purchase in Canada and bring back, versus what Canadians can purchase in the United States and take back to their country. So, we think that's a positive step forward."

By comparison, the United States limit for online shopping from other countries is US$800.

But this rule, known as "de minimis" shipment value levels, only applies to shipments. It doesn't change how much Canadians can buy on their visits to the U.S., an amount that increases if they're visiting for longer than 24 hours.

Merritt predicts most of the USMCA agreement won't have a huge impact on Maine's economy. But he says another country's recent trade deal with the U.S. does.

He notes Maine's biggest export is seafood - mostly live lobster - and China is a major customer.

"A small but significant percentage of that was going to China prior to the imposition of tariffs back in July of 2018," says Merritt. "In 2018, about 14% of what we were exporting in terms of live lobster went to China - and in 2019, we were down to 7%."

Trump's new trade deal with China this month does not lift most of the tariffs, including on lobster. But Merritt points out that China is committed to buying more American goods - including lobster, which is the only seafood item specifically named in the trade deal.

Laura Rosbrow-Telem, Public News Service - ME