The U.S. House of Representatives passed a bill to enact President Donald Trump’s U.S.-Mexico-Canada Agreement (USMCA) on Dec. 19, 2019, by a vote of 385-41. The measure now goes to the Senate, which The Hill reports is also expected to pass following the conclusion of Trump’s impeachment trial.
According to USDA, USMCA will advance U.S. agricultural interests in two of the most important markets for American farmers, ranchers and agribusinesses. Canada and Mexico are the first and second largest export markets for U.S. food and agricultural products, totaling more than $39.7 billion food and agricultural exports in 2018, according to USDA, and these exports support more than 325,000 American jobs.
All food and agricultural products that have zero tariffs under the North American Free Trade Agreement (NAFTA) will remain at zero tariffs. Since the original NAFTA did not eliminate all tariffs on agricultural trade between the U.S. and Canada, the USMCA will create new market access opportunities for U.S. exports to Canada of dairy, poultry and eggs, and in exchange the U.S. will provide new access to Canada for some dairy, peanut and a limited amount of sugar and sugar-containing products.
“I’ve long said that support for USMCA crosses political parties, the bipartisan passage of the agreement today is proof of that,” U.S. Secretary of Agriculture Sonny Perdue said. “I am pleased the House finally brought this agreement to a vote and encourage quick passage in the Senate. President Trump delivered on his promise to replace NAFTA and USMCA is a huge success for America’s farmers and ranchers. This agreement will unleash the bounty of America’s agricultural harvest to two of our largest trading partners in the world and it is critical to the success of rural America.”
It did not take long for agriculture groups to respond to the news. Assn. of Equipment Manufacturers (AEM) president Dennis Slater said, “With today’s bipartisan House vote to ratify the USMCA, we’re another step closer to securing a North American trade deal that works for U.S. farmers, equipment manufacturers, and hardworking American families. The USMCA will be a boon for our industry and the broader U.S. economy, adding up to $68 billion to our economy, creating 176,000 jobs, and preserving duty-free market access to our Canadian and Mexican trading partners. We now urge the Senate to follow the lower chamber’s lead quickly when Congress returns in the new year.”
The National Corn Growers Assn. released the following statement from president Kevin Ross. “All of agriculture should be incredibly proud to see these efforts pay off with such a strong, bi-partisan vote. We wouldn’t be at this stage in the ratification process without the hard work of individual farmers across the country. Ratifying USMCA has been NCGA’s top legislative priority because Mexico and Canada are the U.S. corn industry’s largest most reliable markets.”
The trade deal will help all sectors of the U.S. ag economy. According to the U.S. Meat Export Federation (USMEF), Canada and Mexico account for one-third of all U.S. red meat exports. USMEF president and CEO Dan Halstrom commented, “Ratification of USMCA is an important step in solidifying trade relations with Mexico and Canada, which are critical destinations for U.S. pork, beef and lamb … We look forward to the Senate taking up this legislation as soon as possible and completing the ratification process.”
Mexico is the #2 market for whole soybeans, meal and oil, and Canada is the #4 buyer of meal and #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 (NAFTA), according to the American Soybean Assn. Under NAFTA, U.S. soybean sales to Mexico quadrupled and to Canada doubled, the association said.
“This is a win for soybean farmers and a win for the Administration and Congress. Their efforts to pass a free trade deal that can restore certainty and stability to an important export market for our farmers demonstrates that they can accomplish great things working in unison,” said Bill Gordon, soy grower from Worthington, Minn., and ASA president. “We express our thanks to the House of Representatives for this momentous act. We now look to the Senate to take up and pass USMCA in early 2020.”
“There is no doubt the House passage of USMCA is a win for America's farmers, agribusinesses and the communities they serve,” said Agricultural Retailers Assn. President and CEO Daren Coppock. "This historic trade agreement will benefit agricultural retailers and their farmer customers by expanding market access and preserving zero-tariff platforms among ag products. The agreement is expected to increase ag exports and gross domestic product at a time when the ag economy sorely needs a boost.”