The Dec. 10 announcement that the U.S. House of Representatives and White House approved a modified version of the U.S.-Mexico-Canada Agreement prompted Minnesota farm organizations to both offer praise and concern.
“Minnesota Farm Bureau applauds the progress that has been made on the United States-Mexico-Canada Agreement and the leadership shown by the Minnesota Congressional delegation and the administration to get to this point,” said Kevin Paap, MFB president. “Minnesota farmers and ranchers depend on a reliable trading relationship with our two closest neighbors.” He urged Congress to quickly approve the agreement. Ratification of USMCA would send the signal to global trading partners that the U.S. is back in business in the international marketplace, he said.
“Minnesota Farm Bureau will continue to diligently work to protect and expand market opportunities and get USMCA across the finish line,” he added.
The Minnesota Farmers Union was pleased that the House was able to secure several changes in USMCA from the original agreement President Donald Trump proposed in September 2018. Of note were the elimination of a 10-year protection period for new biologic drugs and Mexican labor reform. If the drug protection provision had been kept in the agreement, it would have made prescription drugs more expensive and increased the cost of health care, according to MFU.
“As the full text of USMCA has not yet been released, MFU has not come to conclusive judgment on the agreement,” said Gary Wertish, MFU president. “However, we’re glad to hear a deal has been reached and that it appears to have addressed some significant issues our organization had with the original agreement proposed by the Trump administration.”
Although the agreement isn’t likely to drastically change on-farm prices, it is a positive step forward, he added.
Wertish also thanked Speaker Nancy Pelosi and members of the Minnesota Congressional delegation who stood firm on strengthening labor and environmental protections and eliminating the biologic drugs provision.
“It was worthwhile to Minnesota’s family farmers that they took the time to get a better deal,” he said.
At MFU’s Nov. 23 convention banquet, keynote speaker Lori Wallach, director of Public Citizen’s Global Trade Watch, shared concerns with USMCA as it was originally proposed by the White House, as well as sharing data showing how the North American Free Trade Agreement caused trade deficiencies.
Under NAFTA and World Trade Organization rules, food imports to the U.S. grew faster than food exports, causing 240,000 small-to-medium U.S. farms to be wiped out, Wallach said. Promised benefits of increased farm exports and profits under NAFTA didn’t go to farmers or rural communities. Instead, corporate control over agriculture occurred and multinational firms captured export markets. The new trade agreement does not fix NAFTA’s shortcomings, she added.
Based on federal data her organization obtained under the Freedom of Information Act, U.S. food imports increased 4% per year while U.S. food exports grew only 1%.
“Our free trade agreement turned out to import more food,” she said, noting that, “we have a NAFTA ag trade deficient.” Specific to Minnesota, she said the data show that the state lost 53,000 jobs due to NAFTA.
According to Global Trade Watch, U.S. exports of agricultural goods in 2018 to NAFTA partners totaled $44 billion, while the U.S. imported $26 billion in agricultural goods from Mexico and $23 billion from Canada. The U.S. had a $2.6 billion agricultural trade surplus with the NAFTA countries in 1993 before NAFTA, but a $9 billion NAFTA agriculture trade deficit by 2018.
“Passing NAFTA renegotiated won’t fix problems in farm country,” Wallach said.
Yet, with the revised House-Trump USMCA, the concern about biologic drugs has been addressed.
Wallach said the original USMCA had provisions that allowed pharmaceutical corporations to have at least 10 years of marketing exclusivity for new biological medicines. That would have blocked competition from generics. Free trade agreements should not lock in protectionist monopolies that contribute to high drug prices, Wallach noted. Plus, that provision would have prohibited Congress from lowering drug prices.
R-CALF USA, a national producer-only cattle trade association, still has concerns with USMCA, saying the agreement does nothing to change provisions impacting cattle and beef trade between the United States, Canada and Mexico.
The organization said USMCA does not include mandatory country-of-origin labels for beef. For a few years, that provision was included in NAFTA.
"We've asked Congress and the president to, at the very least, restore mandatory country-of-origin labels [COOL] so American cattle farmers and ranchers could compete against the duty-free, cheaper and undifferentiated cattle and beef flowing into our country and depressing our markets,” the organization said in a news release. R-CALF said the U.S. beef industry lost 20% of its cattle operations and 75% of its farmer-feeder-type feedlots under NAFTA. It urges Congress to vote USMCA down in its present form.