After passage of the United States-Mexico-Canada Agreement (USMCA) in the House of Representatives on December 19, 2019, the deal came to a standstill while awaiting the Senate’s decision to pass the agreement. On January 16, 2020, the Senate passed USMCA with a vote of 89 ayes and 10 nays. As of press time, USMCA is waiting for President Donald Trump’s signature to go into effect.
USMCA set out to revise the prior trade agreement between the U.S., Mexico, and Canada, otherwise known as NAFTA (North American Free Trade Agreement).
According to the Office of the United States Trade Representative (USTR), USMCA creates a more level playing field for American workers, including improved rules of origin for automobiles, trucks, other products, and disciplines on currency manipulation. USMCA will also support the 21st Century economy through new protections for U.S. intellectual property and ensuring opportunities for trade in U.S. services. Digital Trade, Anticorruption, Good Regulatory Practices, and a chapter dedicated to ensuring Small and Medium sized Enterprises also reap the benefits of the new trade agreement are in store.
By modernizing and strengthening food and agricultural trade in North America, USMCA is expected to increase gross domestic product by $65 billion.
The ag industry was quick to offer comments on the long-awaited action on USMCA. Following is a compilation of statements.
National Farmers Union (NFU):
“For 25 years, National Farmers Union has stood in staunch opposition to the disastrous free trade framework established by NAFTA. By prioritizing the interests of corporations over those of working-class Americans, this framework is largely responsible for our massive trade deficit, the rapid exportation of domestic jobs, the decline of wages, and the deterioration of our national sovereignty,” NFU President Roger Johnson said.
“Though USMCA is not a perfect replacement, it does make some important changes to its predecessor. We are particularly encouraged by the inclusion of stronger labor standards, more robust enforcement mechanisms, and better environmental protections. On top of that, we are pleased to see the partial elimination of investor-state dispute settlement (ISDS) arbitration procedure, which is the source of many of our aforementioned grievances against NAFTA.
“That being said, there is still significant room for improvement. This trade deal still doesn’t restore commonsense Country-of-Origin-Labeling, nor does it address import dumping. With that in mind, we urge Congress and the Trump administration to continue working to strengthen trade deals so they better support the success of family farmers and rural communities.”
National Cattlemen’s Beef Association (NCBA):
“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,” NCBA President Jennifer Houston said. “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 thankful to every Member of Congress in both House and Senate who voted for USMCA, and we thank President Trump for continuing to secure and defend strong market access for America’s cattlemen and cattlewomen.”
Montana Farm Bureau (MFBF):
The Montana Farm Bureau said USMCA is especially important to agricultural producers as it sets up increased free, fair and equitable trade between the three countries.
“Montana Farm Bureau has long been pushing for this agreement which will greatly benefit our state’s farmers and ranchers,” MFBF President Hans McPherson said. “Farm Bureau thanks Senator Jon Tester, Senator Steve Daines and Congressman Greg Gianforte for voting to ratify the agreement.
“We are finally seeing movement on many trade fronts, and we look forward to seeing the benefits to America’s farmers and ranchers as well as to consumers. It’s a great day for agriculture,” McPherson concluded.
U.S. Senator Steve Daines (R-MT):
Daines serves as Montana’s lone voice on the U.S. Senate Finance Committee, which has jurisdiction over international trade, and has been a strong proponent of advancing this trade agreement.
“This trade deal is a big win for our farmers, ranchers, and small businesses across Montana and the country,” Daines said. “This deal provides certainty for Montana ag and protects critical access to our two biggest trading partners. I’m thankful for President Trump’s leadership getting this done and look forward to it being signed into law.”
North Dakota Agriculture Commissioner Doug Goehring:
“The new agreement builds on NAFTA to benefit farmers, ranchers and agribusiness,” Goehring said. “It expands access for dairy, gives our wheat fair treatment in grading, and enhances rules for sanitary and phytosanitary measures.
“With U.S. agriculture facing uncertainty in the global marketplace, the USMCA will provide a much-needed boost to producers and rural communities,” Goehring said. “The new agreement ensures U.S. farmers, ranchers, and food processors can continue to access and grow exports to two of their most important global markets.”
North Dakota Grains Growers Association (NDGGA):
“The NDGGA has worked very hard on several issues that are covered in this agreement, so we’re pleased to see that North Dakota agriculture will benefit from this deal. We’ve met with the Canadian Embassy to discuss grain grading and with the Mexican embassy to discuss barley exports, so we’re glad to see that work has paid off,” NDGGA President Dennis Haugen said.
Haugen said the agreement makes these markets more accessible which should lead to profitable opportunities for North Dakota farmers.
“Canada buys a lot of our crops, and Mexico is the biggest importer of our barley, so unlimited access to these markets is going to be a huge benefit going forward,” Haugen said.
Not all agricultural groups were supportive of the passage of USMCA. R-CALF USA issued a strong warning of continued contraction in the U.S. beef industry and rallied online support urging producers to email President Trump requesting Mandatory Country-of-Origin Labeling in USMCA.
“We are deeply disappointed that the U.S. Senate has ignored the interests of United States cattle farmers and ranchers by voting to extend the 25-year-old NAFTA agreement (North American Free Trade Agreement) under its new name, the USMCA,” Bill Bullard, R-CALF USA CEO, said.
“The USMCA makes no changes at all for the largest sector of American agriculture, the U.S. cattle industry. Importers of beef and cattle will continue to have 30 percent more inventories of cattle from which to source cheaper, undifferentiated cattle and beef and U.S. cattle producers are left without any ability to distinguish their superior product with a mandatory country-of-origin label. This means United States consumers will not be able to choose to support United States cattle farmers and ranchers.
“The combination of cattle and beef is the leading agricultural import from Canada and Mexico. We sell those countries less than $2 billion in cattle and beef each year and turn around and buy over $4 billion of the very same products.
“This persistent trade deficit has caused our U.S. cattle industry to shrink over the past 25 years. We now have fewer cattle producers, cattle, auction yards, feedlots and packers with which to start this new USMCA era. That means our industry now lacks the critical mass of competitive infrastructure it had when we entered NAFTA more than two decades ago.
“Because our industry now lacks the critical mass of competitive infrastructure to withstand the shock of the new USMCA, we should expect our industry to continue its contraction.
“We will now go to Congress to seek out members who share our concern that U.S. cattle producers have been rendered non-competitive under the USMCA because they have no means to distinguish their exclusively USA-produced beef from the cheaper, undifferentiated substitutes that will continue flooding our markets.”BACK