by Kayla Sargent
Mexico became the first country to ratify NAFTA’s replacement, the United States — Mexico — Canada Agreement (USMCA), last week with a landslide 114-4 vote. In the meantime, President Trump hosted Canadian Prime Minister Justin Trudeau whom encouraged Congress to make USMCA a bipartisan priority. Canada has introduced legislation in the parliament to ratify the new agreement.
Prime Minister Trudeau said the three countries have worked diligently to create a deal that is good for workers from each country. He called it a “great opportunity” to continue building “on the closest alliance in the world, between Canada and the United States.”
President Trump also expressed his confidence in the new deal that would replace a 25-year old trade agreement. He said the three countries coming to a consensus provides a stronger front in other trade conflicts.
“It’s great for the farmers, manufacturers, and unions,” President Trump said. “In a trade sense, we’re competing with the European Union. We’re competing with China. It gives us a bigger dialogue. It gives us a bigger platform.”
There is strong momentum across the country for ratification of the USMCA as well. Twenty-eight of the nation’s Governors sent a letter to Congressional leaders urging swift passage of the deal, including Idaho Governor Brad Little, Nebraska Governor Pete Ricketts, North Dakota Governor Doug Burgum, South Dakota Governor Kristi Noem, and Wyoming Governor Mark Gordon.
The Governors said the USMCA is a “comprehensive 21st century agreement that protects workers across the nation, establishes a level playing field among the United Starts and our partners, and encourages free and fair trade.” They called ratification a “critical” move to boost the economy and “expand access to markets for our farmers and ranchers and reduce barriers for agricultural markets.”
President Trump has high hopes that Congress can move forward with the USMCA, telling reporters that he “really believes Nancy Pelosi and the House will approve it.” He expects the Senate to quickly move it forward as well.
With the agreement only a “stone’s throw away” the cattle industry is still divided on the final deal. National Cattlemen’s Beef Association (NCBA) made it a policy priority in early 2019 to secure swift passages of the USMCA.
R-CALF USA believes the deal will have a “substantially negative” impact on the U.S. cattle industry though, R-CALF USA CEO Bill Bullard reported to the New American. The group believes that underpriced imports from Canada and Mexico are displacing domestic cattle and sheep production. R-CALF USA said the repeal of COOL, and not incorporating it into USMCA, means U.S. producers are not able to fairly compete with beef from imported cattle as the products are not differentiated.
The top two countries exporting cattle to the U.S. are Mexico and Canada, according to USDA ERS data. From January to April 2019 imported cattle from Mexico totaled 503,176 head and 286,338 head from Canada. In comparison, the U.S. exported a total of 78,756 head, with 73,949 going to Canada and Mexico.
The top three countries exporting beef to the U.S. are Canada, Australia, and Mexico. Canada sent 272,450,112 pounds of beef to the U.S. between January and April 2019 and Mexico shipped 192,216,299 pounds. In the same time period, the U.S. exported a total of 229,796,744 pounds to Canada and Mexico.
Other agriculture sectors are hopeful for swift ramification. A group of nearly 1,000 U.S. food and agricultural organizations penned a letter to Congressional leaders highlighting the benefits the trade deal would provide, namely market access for producers and a “more abundant supply of high-quality, safe food at affordable prices” for consumers. The group pointed to the fact that in the last 25 years, under NAFTA, U.S. food and agricultural exports to Canada and Mexico grew from $9 billion to nearly $40 billion as of 2018.
“USMCA builds on the success of the NAFTA agreement, and will ultimately lead to freer markets and fairer trade,” the letter stated, noting that the the deal could deliver an additional $2.2 billion in U.S. economic activity via the food and agricultural exports. It cited an International Trade Commission report that found the USMCA could have broad impact on all industry sectors in the U.S. economy resulting in $68.2 GDP growth.
Signees of the letter include representatives from cotton, dairy, wheat, soybean, sugar, pork, corn, cattle, meat, processing, and other produce sectors of the agricultural industry. National organizations and their state affiliates signing in support included NCBA, National Association of Wheat Growers, American Farm Bureau Federation, National Pork Producers Council, National Chicken Council, National Corn Growers Association, and many others.BACK