The United States-Mexico-Canada Agreement takes effect today (July 1).
The agreement modernizes the 25-year-old North American Free Trade Agreement. It was signed on Nov. 30, 2018.
President Donald Trump hailed the deal, saying "USMCA is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our farmers and manufacturers, reduces trade barriers to the U.S. and will bring all three great nations together in competition with the rest of the world."
The Office of the U.S. Trade Representative says the key achievements include:
- Expanded market access for U.S. dairy, poultry and egg products;
- Elimination of Canada's Milk Classes 6 and 7;
- A mechanism for cooperation on ag biotechnology;
- Commitments to avoid trade-distorting policies;
- Fair treatment in quality grading for U.S. wheat, and
- Non-discrimination and transparency commitments regarding the sale and distribution of alcohol beverages.
The trade deal is expected to increase agricultural exports by $2 billion annually and contribute an overall increase of $65 billion to the U.S. gross domestic product, according to the American Farm Bureau Federation.
“The launch of the USMCA brings optimism to the country’s farmers and ranchers at a time they need it the most,” said American Farm Bureau Federation President Zippy Duvall. “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."
However, the USMCA is not a magic bullet for the challenges facing agriculture, Duvall said. 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,” Duvall said. “We will continue to work with the administration to level the playing field for fruit and vegetable growers facing increased competition from Mexico.”
Canada and Mexico are leading trading partners of the United States.
What are groups saying?
"The agreement provides new opportunities for agricultural exports, enhances standards for biotechnology, reduces trade distorting policies, and modernizes sanitary and phytosanitary standards using a science-based approach," said Chuck Conner, president of the National Council of Farmer Cooperatives. "By reaffirming our relationship with our two closest trading partners, the USMCA will also help grow rural economies and provided jobs for many Americans beyond the farm gate."
"This trade agreement benefits many commodities, such as dairy, poultry and wheat," said Missouri Farm Bureau President Blake Hurst. "It also ensures that products from all countries will be graded and treated in an equal manner. The deal also addresses new technologies that are important to farmers and ranchers. We look forward to a continued strong partnership with Canada and Mexico."
“Questions still remain about how countries will carry out the hotly debated provisions, but at least sectors spanning from agriculture to manufacturing, and labor, have more trade certainty than they did at the end of 2019," said Ryan Bernstein, a senior member of the Federal Public Affairs group in Washington with McGuireWoods Consulting.