The new trade agreement between the United States, Mexico and Canada aims to ensure that financial firms can operate in each other’s markets on equal footing.
While the financial services sector was not a major area of dispute during negotiations for the U.S-Mexico-Canada Agreement (USMCA), the industry is covered by chapter 17 of the agreement.
Chapter 17 provides that financial services firms, investors, and products, should be treated in a way that is equivalent in “like circumstances” in each country, the USMCA states.
“For greater certainty, whether treatment is accorded in ‘like circumstances’ … depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions, investments in financial institutions, financial institutions, or financial services or financial service suppliers on the basis of legitimate public welfare objectives,” it states.
The USMCA guards against the imposition of limitations on cross-border business, such as quotas. It also aims to ensure market access for the provision of new services, although governments retain the ability to refuse authorization for prudential reasons.
Chapter 17 also establishes a Committee on Financial Services to supervise the agreement’s implementation for financial services.