The U.S. Senate passed the U.S.-Mexico-Canada Agreement (USMCA) by a bipartisan vote of 89-10. The trade deal was approved by the House of Representatives on Dec. 19. With passage through both congressional chambers, USMCA will now move to the president’s desk for signature. The passage comes just one day after President Donald Trump signed a Phase 1 trade agreement with China.
U.S. Secretary of Agriculture Sonny Perdue commented, ““We’ve long waited for this day and now USMCA will finally head to the President’s desk,” Secretary Perdue said. “The passage of USMCA is great news for America’s farmers and ranchers. With Congressional consideration now complete, our farmers and ranchers are eager to see the President sign this legislation and begin reaping the benefits of this critical agreement. I thank President Trump and Ambassador Lighthizer for successfully delivering an improved and modern trade agreement and working so hard for the people of American agriculture to get this deal across the finish line.”
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.
Various sectors of the ag industry were quick to respond to the news. Kip Eideberg, senior vice president of government and industry relations for the Assn. of Equipment Manufacturers (AEM) released the following statement following the Senate’s vote:
“This new agreement updates the current, decades-old trade deal, supporting a modernized global marketplace. As members of the USMCA Coalition, we are proud to have joined more than 600 associations and business groups in advocating for a stronger trade deal that will add up to $68 billion to our economy, create 176,000 jobs, and preserve duty-free market access to our Canadian and Mexican trading partners. We applaud President Trump, Vice President Pence, Senate Majority Leader McConnell, and House Speaker Pelosi for their efforts to negotiate and ratify the agreement.”
The American Soybean Assn. (ASA)’s Bill Gorden says, “ASA has worked throughout the year to encourage legislative support for USMCA, so we appreciate Congress working with the administration, coming together for this bipartisan effort, and getting USMCA to the final step. In addition to securing the Mexican market as the second largest importer of U.S. soybeans, the terms agreed to by Canada will increase U.S. poultry and dairy exports, which is also a positive for our industry.”
According ASA, Mexico is the #2 market for whole beans, 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). Under NAFTA, U.S. soybean sales to Mexico quadrupled and to Canada doubled.
The National Corn Growers Assn. (NCGA) also applauded the news. “Nearly a year ago, NCGA’s farmer members, recognizing the importance of our trading relationship with Mexico and Canada, declared passage of USMCA their top legislative priority,” says NCGA president Kevin Ross. “Since that time, corn farmers have been using every opportunity to urge members of Congress to support the new trade agreement and we are incredibly thankful for the strong bipartisan support it has received in the Senate today.
“NCGA thanks the U.S. Senators who voted to ensure corn farmers will continue to have access to our largest and most reliable markets and is especially grateful for the leadership of Senate Finance Committee Chairman Chuck Grassley who has been a steadfast supporter of corn growers and committed to getting USMCA across the finish line.”