Jul 1, 2020USMCA takes effect: Welcome news for struggling farmers
The United States-Mexico-Canada Agreement goes into effect July 1, at a crucial time for farmers and ranchers struggling to recover from COVID-19 losses and a depressed agricultural economy. The expected $2 billion annual increase in U.S. agricultural exports and overall increase of $65 billion in gross domestic product will provide a welcome boost.
USDA estimates COVID-19 contributed to a $50 billion decline in commodity value alone for 2019, 2020 and 2021 production totals. This does not include all of agriculture’s losses, which would be billions more.
“The launch of the United States-Mexico-Canada Agreement brings optimism to the country’s farmers and ranchers at a time they need it the most,” American Farm Bureau Federation President Zippy Duvall said in a news release. “We’re grateful for the opportunity to build on the success of the North American Free Trade Agreement, and we’re eager to see the results on America’s farms. It’s important that our neighbors uphold their end of the deal, so the agreement provides a stabilizing force amid the unpredictability of a pandemic in all three countries.”
Under USMCA, Canada will increase quotas on U.S. dairy products, benefitting American dairy farmers by $242 million. Canada will also treat wheat imports the same as domestic wheat for grading purposes. Mexico has also agreed that all grading standards for ag products will be non-discriminatory. The agreement also enhances science-based trading standards among the three nations.
USMCA is not a magic bullet for all the challenges facing agriculture, however. A University of Florida study shows Mexico gaining ground in imports of produce like tomatoes, strawberries and bell peppers. USMCA does not alter the rules for imports of produce from Mexico. Farm Bureau supports the United States Trade Representative and USDA field hearings to receive grower input on the issue.
“As with all trade agreements, there are some areas that still need attention,” said Duvall. “We will continue to work with the administration to level the playing field for fruit and vegetable growers facing increased competition from Mexico.”
In 2019, Mexico was thenation’s largest overall trading partner followed by Canada.
That same year Canada was America’s number one trading partner for agricultural products followed by Mexico.
Statement by Jim Bair, President & CEO U.S. Apple Association
“As USMCA enters into force today, apple growers and businesses across the country are breathing a sigh of relief. With about 30% of the fresh apple crop exported each year and half of that destined for Mexico and Canada, maintaining duty-free access to these top two markets has been a top priority for USApple. Combined, Mexico and Canada total nearly a half-billion dollars in annual apple sales. The USMCA continues duty-free access to Mexico and Canada for U.S. apples, while maintaining important dispute resolution provisions.
“For more than three years, USApple members have carried out unprecedented advocacy efforts in support of the USMCA. Whether on Capitol Hill, at the White House, at public forums in their hometowns or from their orchards, apple growers and leaders joined the agriculture community in record numbers to bring the USMCA to a successful conclusion.”