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Senate passes USMCA

Ag groups praise passage of updated North American trade deal.

The Senate today passed the United States-Mexico-Canada agreement, referred to as NAFTA 2.0 by some, by a vote of 89-10, sending it to President Trump, Politico reports. The revised trade deal doesn't take effect until approved by Canada. Mexico has already approved the revised pact.

“We’ve long waited for this day and now USMCA will finally head to the President’s desk,” said Agriculture Secretary Sonny Perdue. “The passage of USMCA is great news for America’s farmers and ranchers. With Congressional consideration now complete, our farmers and ranchers are eager to see the President sign this legislation and begin reaping the benefits of this critical agreement."

Ag groups have campaigned for passage of the trade deal and wasted no time in issuing praise.

“Nearly a year ago, NCGA’s farmer members, recognizing the importance of our trading relationship with Mexico and Canada, declared passage of USMCA their top legislative priority," said National Corn Growers Association President Kevin Ross. "Since that time, corn farmers have been using every opportunity to urge members of Congress to support the new trade agreement and we are incredibly thankful for the strong bipartisan support it has received in the Senate today."

"The ratification of USMCA is a crucial win for all U.S. beef producers and a reassurance that U.S. beef will continue to have unrestricted, duty-free access to Canada and Mexico," said National Cattlemen's Beef Association President Jennifer Houston. "NCBA has been a strong supporter of USMCA since day one, and we believe that today’s vote sends a strong message to the rest of the world that the United States believes in free and fair trade."

"We are extremely pleased to see the Senate pass the U.S.-Mexico-Canada Agreement today," said Missouri Farm Bureau President Blake Hurst. "We will continue to work with our leaders at the local, state, and federal level for successful implementation of this updated agreement and focus our efforts on securing more trade deals around the globe."

“This agreement will advance the relationship between two of the most important markets for American farmers and agribusinesses," said Agricultural Retailers Association President and CEO Daren Coppock. “Agricultural retailers and their farmer customers will directly benefit from the expanded market access and the preserved zero-tariff platforms among ag products, which is a relief during a challenging time in the ag economy."

“We applaud the U.S. Senate for passing the landmark United States-Mexico-Canada Agreement today, and look forward to the president’s signature, finalizing U.S. ratification of the trade deal,” said Robert McKnight, Jr., president of the Texas and Southwestern Cattle Raisers Association. “Like the U.S.-Japan trade agreement that took effect at the beginning of the year, this is yet another historic trade agreement that will benefit American cattle producers for decades to come."

The American Soybean Association said Mexico is the No. 2 market for whole beans, meal and oil, and Canada is the No. 4 buyer of meal and No. 7 buyer of oil for U.S. soybean farmers, making the trade agreement essential to sustaining the growth realized in those two countries under the North American Free Trade Agreement. Under NAFTA, U.S. soybean sales to Mexico quadrupled and to Canada doubled.

“In addition to securing the Mexican market as the second largest importer of U.S. soybeans, the terms agreed to by Canada will increase U.S. poultry and dairy exports, which is also a positive for our industry," said Bill Gordon, ASA president.

The USMCA is expected to result in a $65 billion increase in gross domestic product. Canada will increase quotas on U.S. dairy products, benefitting American dairy farmers by $242 million, American Farm Bureau says. Canada will also treat wheat imports the same as domestic wheat for grading and pricing.

“This trade agreement comes at a critical time for farmers and ranchers, increasing optimism that we’ll turn the corner in 2020,” said American Farm Bureau President Zippy Duvall. “USMCA is an important step toward restoring the competitiveness of America’s farmers and ranchers, strengthening our trade relationships in North America and setting an example for agreements with other important trading partners.”

Key provisions of the USMCA include:

  • America’s dairy farmers will have expanded market opportunities in Canada for a wide variety of dairy products. Canada agreed to eliminate the unfair Class 6 and 7 milk pricing programs that allowed their farmers to undersell U.S. producers.
  • The agreement specifically addresses agricultural biotechnology – including new technologies such as gene editing – to support innovation and reduce trade-distorting policies.
  • The agreement institutes a more rigorous process for establishing geographical indicators and lays out additional factors to be considered in determining whether a term is a common name.
  • The three countries agree to strengthen disciplines for science-based measures that protect human, animal, and plant health while improving the flow of trade.
  • U.S. poultry producers will have expanded access to Canada for chicken, turkey, and eggs.
  • Canada agrees to terminate its discriminatory wheat grading system, enabling U.S. growers to be more competitive.
  • The three countries agree to avoid technical barriers to trade through non-discrimination and transparency regarding sale, distribution

 

"USMCA provides U.S. pork producers with certainty in two of our largest export markets. It received strong support in both chambers of Congress, and we look forward to seeing President Trump sign it into law," said National Pork Producers Council President David Herring.

"This new agreement will provide the millions of hard-working men and women in U.S. agriculture with a huge economic win and allow them to compete on the global stage by ensuring that markets with our strongest trading partners remain open and fair,” said The Fertilizer Institute Vice President of Stewardship and Sustainability Lara Moody. “Mexico and Canada are two of the United States’ biggest trading partners and together import over 60% of U.S. agricultural goods.”

“USMCA, the China trade agreement, the recently enacted U.S.-Japan Trade Agreement, and the U.S.-South Korea Rice Agreement are moving us toward rebalancing the scales of international trade," Duvall said. "It is important this trend continues as the U.S. negotiates agreements with other international trading partners. We’re making great strides in giving farmers and ranchers fair access to the global market again.”

Additional trade agreements include the U.S.-European Union negotiations, as well as an agreement with the United Kingdom as it leaves the European Union.

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