Mexico, Canada and the U.S. will sign the USMCA on Tuesday in Mexico, Mexican President Andres Manuel Lopez Obrador said in his daily press conference. The deal must then be approved by legislative bodies in each country.
The USMCA trade agreement will preserve or expand upon market access for U.S. agricultural products in the North American market. In addition to maintaining a tariff-free environment for most agricultural goods, USMCA also will help address non-tariff barriers.
- Facilitate cross-border trade flows through higher levels of regulatory coherence and cooperation;
- Implement timelines and notifications for adverse import checks;
- Include steps to reduce the likelihood of trade disruptions in products of agricultural biotechnology;
- Use technical consultations for sanitary and phytosanitary (SPS) disputes; and require that SPS standards be grounded in science and based on proper risk assessments and implemented using accepted risk management techniques
Ag groups are reacting to the news.
The International Dairy Foods Association heralded the announcement.
“Once ratified, the new USMCA deal also delivers peace of mind for our businesses, removing the handcuffs of uncertainty that have constrained business decisions over the past two years as the deal was negotiated," said Michael Dykes, DVM, president and CEO of the International Dairy Foods Association. "Make no mistake about it, for the U.S. dairy industry—farmers, processors, and suppliers—the USMCA deal is a major win that levels the playing field with our largest trading partners."
The wheat growers found several positives in the news.
“U.S. wheat growers need to continue trading freely and fairly with Mexico, our largest international customer, and this agreement will finally end that uncertainty,” said Doug Goyings, U.S. Wheat Associates Chairman and a wheat farmer from Paulding, Ohio. “In addition, if U.S. farmers want to deliver wheat across the border to a Canadian elevator, and that wheat is on Canada’s varietal registration list, under USMCA it will not be downgraded.”
Soybean growers were pleased too.
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.
“We are very happy to hear a bipartisan compromise has been achieved, and we now encourage our Congressional leaders to swiftly ratify this agreement by bringing it to vote,” said Davie Stephens, soy grower from Clinton, Kentucky, and American Soybean Association president.
The Association of Equipment Manufacturers said the deal is good news for equipment manufacturers who have benefitted from duty-free market access to the Canadian and Mexican markets.
“Getting this across the finish line will preserve duty-free market access to our most important trade partners, add more than $68 billion to the U.S. economy, and create 176,000 U.S. jobs,” said Dennis Slater, AEM president.
Growth Energy CEO Emily Skor says Canada is a leading export market for U.S. ethanol and Mexico is the largest export destination for U.S. dried distillers grains.
“We have a rich history of trade with Mexico and Canada, and the USMCA strengthens that vital economic bond between our three nations,” Skor said.
"Mexico's approval of USMCA changes proposed by the United States is welcome news for U.S. pork producers and all of American agriculture," said National Pork Producers Council President David Herring, a pork producer from Lillington, N.C., while pledging continued pressure to get the deal through Congress.
The National Corn Growers Association praised the bipartisan efforts that brought the USMCA to the point of agreement.
"Today’s announcement brings us one step closer to ratifying this important agreement and securing the future of our trading relationship with Mexico and Canada, the top export market for U.S. corn farmers," said NCGA President Kevin Ross. "It’s been a brutal year for many farmers who really need the certainty this would provide for agricultural trade. I urge lawmakers to pass USMCA and help us close out 2019 with a win for America’s farmers and the U.S. economy."
As Ross said, the deal must still be voted upon in the U.S. House of Representatives. House Speaker Nancy Pelosi said this vote could take place next week.
“We urge the House to expeditiously pass this agreement so it can be ratified by the Senate this year,” said Randy Gordon, National Grain and Feed Association President and CEO. “Doing so will be a tremendous win for the United States and the entire North American region and our interdependent economies.”
“Washington has worked hard to make USMCA an even better deal for America’s dairy farmers and exporters; now we are counting on Congress to move expeditiously to pass USMCA and usher in its significant improvements to trade rules,” said Tom Vilsack, president and CEO of the U.S. Dairy Export Council. “Finalizing USMCA will bolster international confidence in the U.S. as a serious negotiating partner and build momentum for other trade agreements in key markets abroad. Without this crucial trade agreement, Made-in-America dairy and agriculture products could be left behind in the new year.”
“NAWG hopes that today’s news will motivate Congress to take a vote on USMCA before the end of the year,” said National Association of Wheat Growers President and Lavon, Texas, wheat farmer Ben Scholz. “Wheat growers view this as a major step in getting USMCA over the finish line and hope that it will help those members who are undecided to vote ‘yes’ on this critical trade deal.”
The American Farm Bureau asked for quick action too.
“We urge members of Congress to swiftly approve the United States-Mexico-Canada Agreement,” said American Farm Bureau Federation President Zippy Duvall. “Agriculture is at a critical crossroads with the downturn in commodity prices, losses from natural disasters and the trade war. This is an opportunity for Congress not only to help U.S. farmers and ranchers turn the corner on trade, but also show that Washington can still get things done on a bipartisan basis.”
Support for USMCA is not unanimous among ag groups though.
R-CALF USA says the USMCA will benefit agribusinesses at the expense of working cattle producers. USMCA is a step backward from the North American Free Trade Agreement, which will be replaced with the new accord, because it lacks Country of Origin Labeling.
"Although the U.S. cattle industry is the largest segment of American agriculture, making it an unsurpassed economic cornerstone for Rural America, the proposed USMCA does absolutely nothing to change provisions impacting cattle and beef trade between the United States, Canada and Mexico,” said R-CALF USA in a media statement.
The National Farmers Union is reserving judgement until it’s able to review the text of the revised agreement.
“The free trade framework established by NAFTA has dominated our international trade deals over the past two-and-a-half decades, to the detriment of American workers – it has contributed to the movement of rural manufacturing jobs overseas, caused our national deficit to balloon, lowered wages, and eroded national sovereignty,” said NFU President Roger Johnson. “Though we are encouraged by efforts to reform this framework, earlier drafts of USMCA did not go far enough to protect family farmers and rural communities.”
Rural lawmakers had been talking about USMCA for months and several leaders expressed support for the deal.
“USMCA is critical for the success of our farmers, ranchers, producers and manufacturers who rely on trade to grow their businesses and create more jobs,” said Sen. Pat Roberts, R-Kansas. “I look forward to reviewing the final text of the agreement and working with my colleagues in the Senate to finalize this trade agreement.”
“Today’s announcement on the United States Mexico Canada Agreement represents real progress for our workers, our farmers and our country,” said Rep. Cheri Bustos, D-Illinois.
“I have been pushing for months to get this deal to the finish line, and this announcement is great news for farmers, businesses and workers, in western Minnesota and nationwide,” said Rep. Collin C. Peterson, D-Minnesota, chairman of the House Agriculture Committee. “The threat of leaving NAFTA without a deal would have been devastating, and this deal provides needed certainty for our producers. This agreement makes updates to how the three countries will address biotechnology, and sanitary and phytosanitary (SPS) issues. The USMCA also preserves the market our farmers are currently accessing while making modest gains for our dairy, poultry, and wheat growers in the Canadian market."
“Trade is vital to American agriculture, especially for the specialty crop, tree nut, dairy and livestock producers in the San Joaquin Valley and across California," said House Agriculture Subcommittee on Livestock and Foreign Agriculture Chairman Jim Costa. "The USMCA protects the access they had into the Canadian and Mexican markets, and provides nominal gains in some important areas. It’s good to see that this deal strengthens labor and environmental standards and provides mechanisms to enforce this agreement.”
“Today’s announcement of a deal on USMCA is news America’s farmers and ranchers have been waiting over a year for,” said K. Michael Conaway, R-Texas, House Agriculture Committee ranking member.
Twitter users have been tweeting their views.