The United States-Mexico-Canadian trade deal is now on track for passage through Congress. The three countries started negotiating a new trade agreement to replace NAFTA in 2017. It is a signature achievement of the Trump administration. Democrats in the House have been reviewing and marking up the bill for several months. And Speaker Pelosi announced she will put it up for a vote. So the USMCA should be on its way to passage.
How does will it impact agriculture? According to American Farm Bureau Federation it should be positive. AFBF says the agreement will increase U.S. agriculture exports by $2 billion and result in a $65 billion increase in gross domestic product. It should also provide new markets for American dairy and poultry products, which is particularly relevant right now.
As I’ve indicated before, I’m not savvy on trade negotiations and policies. So I rely on our trade groups for reaction on these types of things. Here’s how they think it will turn out (some of these have been truncated, so click on the link for the full statement):
American Farm Bureau Federation’s President Zippy Duvall:
Agricultural exports to Canada and Mexico increased from $8.9 billion to $39 billion under NAFTA. That boost provided important markets for farmers and ranchers whose productivity has only grown since the agreement was signed. USMCA keeps all those gains and adds improvements in poultry, eggs, dairy and wine. In every way, this new agreement is just as good, if not better than, the one that came before. We thank the Office of the U.S. Trade Representative for all the hard work that went into this accord.
U.S. Dairy Export Council’s Tim Vilsack:
The signing of the USMCA gives America’s dairy industry greater confidence as we head into 2019. We trust that the administration will aggressively enforce both the letter and the spirit of the agreed upon text. Thus, it is imperative that the United States ensures that Canada implements its commitments in a manner consistent with the hard-fought transparency and market-reforming disciplines secured in this agreement.
American Soybean Association’s President Davie Stephens:
We know that the modernizations included in USMCA will make trade with our North American neighbors even smoother. These non-tariff enhancements include the highest enforceable sanitary and phytosanitary (SPS) standards of any trade deal to date, an enforceable biotechnology chapter that supports 21st century innovations, and create a rapid response mechanism to address trade challenges. These provisions not only serve to update the North American agreement but set a paradigm for future free trade agreements.
National Corn Growers Association’s President Lynn Chrisp:
NAFTA has been a resounding success for agriculture. In 2016 alone, American corn growers exported $3.2 billion in corn and corn co-products to Mexico and Canada. USMCA secures and builds upon this important partnership, which is why ratifying USMCA is so important for agriculture.
National Cattlemen’s Beef Association:
There is no higher policy priority for America’s beef producers than maintaining our duty-free access to Canada and Mexico, and that’s exactly what the USMCA will do. The Trump Administration and Speaker Pelosi deserve credit for working together to get this deal done, and now is the time for Congress to approve USMCA so our producers can move forward with the certainty they need and deserve.”
So overall it seems like a pretty positive reaction across the industry. And that’s good. I also think it might help create leverage when negotiating with China and other countries.
What happened to NAFTA? Who benefited during the last 2 or 3 years? Is USMCA a new name for NAFTA? Did farmers benefit from these political games?
USMCA is replacing NAFTA.
(1) who benefits from this “replacement”?
(2) who benefits during the gap between NAFTA until USMCA is in operation and functioning properly?
my guess: not the farmers
Well NAFTA is still in effect so I’m not sure there’s a “gap.” And it would appear that there were some wins for farmers in the new replacement. I’m not really sure what you’re trying to get at otherwise. Unless you’re this is just a I-don’t-like-Trump comment?
I’m not a fan of tearing up the old agreement and create, and rename, a new agreement. Such a scheme costs a great deal of money. Sorry, I prefer a simple and less costly approach.
If the negotiators for each country are equally skilled, will one country make great gains in every part of the agreement? If the farmers in one country see benefits, is that at the expense of the farmers in the other country?
Sorry, I remain confused!!!