Long-awaited news on the pending U.S.-Mexico-Canada Agreement (USMCA) was finally announced today in an apparent deal between the Trump administration, United States Trade Representative Robert Lighthizer, and Speaker of the House Nancy Pelosi. The package now moves forward legislatively.
Carl Bednarski, a Tuscola County farmer and president of the Michigan Farm Bureau (MFB), the state’s largest general farm organization, said the announcement couldn’t come at a better time for the organization’s 44,000 farmer members.
“As the U.S. farm economy continues to feel the effects of numerous trade disputes that have impacted agricultural exports and prices, we are at a critical juncture for approval of a modernized trade deal with Mexico and Canada,” Bednarski said. “Now, it’s time for Congress to take the final step and ratify it immediately.”
According to Bednarski, MFB has actively advocated for USMCA approval since the proposed trade deal to upgrade the 25-year-old North American Free Trade Agreement (NAFTA) was announced between the three countries just over a year ago.
“NAFTA was over a quarter-century old and needed to be upgraded,” Bednarski said. “USMCA does just that — so we’re pleased that it appears there’s finally progress in moving USMCA forward.”
Bednarski, who serves on the American Farm Board of Directors Trade Advisory Committee, expects the USMCA trade deal, once formally ratified, to serve as a model trade agreement in other ongoing trade negotiations, including the European Union and Southeast Asia.
“USMCA is the first free trade agreement for the U.S. that includes measures to address information-sharing and other trade rules related to biotechnology and gene editing,” Bednarski said. “It also enhances science-based trading standards among the three nations as the basis for sanitary and phytosanitary measures for ag and food products.”
USMCA is expected to increase U.S. ag exports by $2 billion and result in a $65 billion increase in gross domestic product.
In 2018, more than 29% of all U.S. farm and food exports totaling $40 billion, went to Canada and Mexico making the two countries a top export market for U.S. agriculture. Those exports also supported more than 325,000 American jobs.
For Michigan’s rural economy, the state’s annual $3 billion in agricultural exports to Canada and Mexico supported 22,800 jobs in 2018. A significant component of USMCA to Michigan is its impact on the state’s dairy industry.
MFB Livestock and Dairy Specialist Ernie Birchmeier said USMCA makes important changes to Canada’s trade-distorting policies and reforms controversial dairy pricing system while providing exclusive access to the Canadian market for U.S. farmers and manufacturers.
“USMCA will add an estimated $548 million to dairy-farm revenues in its first six years after implementation,” Birchmeier said. “Progress on USMCA is certainly welcomed news to Michigan’s dairy economy, after the last five year’s of dismal milk prices.”
Earlier this year, nearly 1,000 American food and agriculture associations and companies announced their support for USMCA and the National Association of State Departments of Agriculture signed a letter to Congressional leadership urging them to ratify USMCA.
California Farm Bureau welcomes agreement on USMCA
Rural and urban California will benefit from improved agricultural trade, and the California Farm Bureau Federation said it’s pleased by today’s announcement of a pending vote on the United States-Mexico-Canada Agreement. The USMCA will reduce barriers to trade throughout North America.
“We’ve been advocating for months for a vote on the USMCA, so we’re happy the White House and Speaker Pelosi have agreed to move forward,” CFBF President Jamie Johansson said. “As a Californian, Speaker Pelosi recognizes how the USMCA will help most California agricultural products gain improved market access to two top export customers.”
Canada is the No. 2 market for California agricultural exports and Mexico ranks fifth. Combined farm exports to the USMCA partners exceeded $4.3 billion in 2017, according to the California Department of Food and Agriculture.
“California food and agricultural exports to Canada and Mexico support more than 56,000 jobs – and jobs will be added as those exports increase,” Johansson said. “Those jobs will benefit rural and urban areas. Agricultural exports support jobs at ports, marketing companies, food processors, trucking firms and other businesses that prepare and move agricultural products from California farms and ranches to customers in Canada and Mexico.”
He said the USMCA will strengthen science-based procedures to protect human, animal and plant health – known as sanitary and phytosanitary measures—while improving the flow of trade. It also contains specific provisions to benefit exports of processed fruits, milk and dairy products, beef, wine, poultry and eggs, and other products.
“We’re encouraged by prospects for a quick, positive vote on USMCA in the House of Representatives,” Johansson said. “The sooner that happens, the sooner Californians will begin reaping the benefits the agreement will bring.”
The California Farm Bureau Federation works to protect family farms and ranches on behalf of nearly 34,000 members statewide and as part of a nationwide network of nearly 5.6 million Farm Bureau members.