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Farm groups back passage of USMCAFarm groups back passage of USMCA

Manufacturing would experience largest gains under new agreement.

Farm Progress Staff

April 19, 2019

4 Min Read

The U.S. International Trade Commission estimates the United States-Mexico-Canada Agreement will raise U.S. real GDP by .35% and add 176,000 jobs.

Released Thursday (April 18) the report also found:

  • U.S. exports to Canada and Mexico would increase by 5.9% and 6.7%, respectively.

  • U.S. imports from Canada would increase by 4.8% and from Mexico by 3.8%.

  • Manufacturing would experience the largest percentage gains in output, exports, wages, and employment, while in absolute terms, services would experience the largest gains in output and employment.

  • The elements of the agreement that would have the most significant effects on the U.S. economy are (1) provisions that reduce policy uncertainty about digital trade and (2) certain new rules of origin applicable to the automotive sector.

What are farm groups saying about the ITC report?

“USMCA builds upon the strong foundation set by the original NAFTA,” said Davie Stephens, soybean grower from Clinton, Kentucky, and American Soybean Association president. Soybean exports to Mexico quadrupled under NAFTA, while soybean exports to Canada doubled. “We know that the modernizations included in USMCA will make trade with our North American neighbors even smoother. These non-tariff enhancements include the highest enforceable sanitary and phytosanitary standards of any trade deal to date, an enforceable biotechnology chapter that supports 21st century innovations, and create a rapid response mechanism to address trade challenges. These provisions not only serve to update the North American agreement but set a paradigm for future free trade agreements.”

Nick Giordano, National Pork Producers Council vice president and counsel, global government affairs, said U.S. pork producers need “zero-tariff trade restored to our largest export market.”

"NPPC supports ratification of USMCA, an agreement that preserves zero-tariff access to markets that represent more than 30% of total U.S. pork exports," Giordano said. "We are eager to see the removal of U.S. metal tariffs that prompted Mexico's 20% retaliatory tariffs nearly a year ago.”

Lynn Chrisp, National Corn Growers Association president, said USMCA builds upon the success of NAFTA.

“The release of the ITC report is an important step in moving USMCA toward Congressional action,” Chrisp said. “ITC reports typically measure the economic impact of new trade agreements and focus on market access. USMCA is different – it’s an update to the North American Free Trade Agreement – which already eliminated most tariffs on exports of U.S. food and agriculture products. So, the ITC report released today doesn’t fully capture the economic benefits of trade with Canada and Mexico, nor the improvements to trade rules in USMCA that benefit agriculture.”

What are others saying?

USMCA will increase U.S. production of auto parts and employment in the auto parts sector, but it will lead to an increase in prices and reduction in domestic vehicle consumption, the ITC finds. – Financial Times

The release checks off a procedural step in the USMCA ratification process. Under NAFTA, nearly all tariffs between the three countries were eliminated, as a result little new growth would come from increase trade in manufacturing and agricultural goods. The report factors in the Trump administration continuing its tariffs on steel and aluminum imports from Canada and Mexico. – Politico

The deal does not take effect until the U.S., Canadian and Mexican legislatures approve it, and the deal faces hurdles in Congress. – The Hill


About the Author(s)

Farm Progress Staff

/author/compiled-by-staff, Farm Progress


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