BUENOS AIRES, Argentina – The leaders of the United States, Canada and Mexico on Nov. 30 signed a new trade agreement, a development that President Donald Trump called “a truly groundbreaking achievement.”
The USMCA pact is largely a modernization of the nearly 25-year-old North America Free Trade Agreement (NAFTA).
The signing of the trade agreement is largely ceremonial, because it will still need to be ratified by all three countries before it can formally take effect. It still must be approved by Congress — a potential challenge for Trump because Democrats take control of the House in less than five weeks. Also, a new Mexican president takes over on Dec. 1 who might not honor the tentative deal struck by his predecessor.
Reaction to the agreement from the agricultural sector has been mostly positive.
“With the signing of the US-Mexico-Canada Agreement (USMCA), US beef producers are one step closer to knowing that unrestricted, science-based trade will continue in North America,” said Kevin Kester, president of the National Cattlemen’s Beef Association. “The agreement brings the trading relationship with our neighbors into the 21st century — and clearly rejects the failed beef and cattle trade policies of the past. Open markets have helped US producers flourish and created billion-dollar markets for US beef. We look forward to working with Congress to get USMCA passed into law as quickly as possible.”
Tom Sleight, president and CEO of the US Grains Council, issued a statement following the signing, calling it “an important step in the new pact’s final approval and the process of modernizing the most important trade agreement to US grain farmers and exporters.”
“In the latest marketing year, Mexico and Canada again proved to be top buyers of US feed grains in all forms, and both countries still hold significant potential for market expansion given the right trade policy frameworks and the robust market development we intend to undertake there with our partners,” he said. “We applaud the many members of the Trump administration, as well as their Mexican and Canadian colleagues, who worked diligently to negotiate this agreement. We see its forward movement as a sign our countries will continue our robust relationship, as business partners and friends.”
Speaking before the US International Trade Commission on Nov. 15, Randy Gordon, president and CEO of the National Grain and Feed Association, said the agreement would bring about several significant advancements in facilitating the trade of grains, oilseeds and their derived products in the North American marketplace.
“The NGFA and NAEGA (North American Export Grain Association) are pleased USMCA maintains and expands current agricultural market access and preserves the dispute-settlement process for antidumping and countervailing duty cases, while modernizing the agreement to address the challenges of 21st century global trade,” said Gordon, who was speaking on behalf of both the NGFA and NAEGA.
While the Canadian dairy industry expressed displeasure with the deal that will increase its competition, the Canadian grain industry, including Cereals Canada, struck a positive tone.
Cam Dahl, president of Cereals Canada, said the USMCA will modernize the agreement in crucial areas, including new chapters on biotechnology and new plant breeding techniques, bringing the agreement up to date with modern technology.
“USMCA also sets the stage for equal treatment by the Canadian grading system for farmers on both side of the Canada/US border,” he said. “Again, this is a modernization that addresses issues that did not exist when the original NAFTA was drafted.”
Agriculture Secretary Sonny Perdue said the revised agreement makes important changes that are beneficial to the agriculture industry.
“We have secured greater access to the Mexican and Canadian markets and lowered barriers for many of our products,” Perdue said. “The deal eliminates Canada’s unfair Class 6 and Class 7 milk pricing schemes, opens additional access to US dairy into Canada, and imposes new disciplines on Canada’s supply management system. The agreement also preserves and expands critical access for US poultry and egg producers and addresses Canada’s discriminatory wheat grading process to help US wheat growers along the border become more competitive.”