From NAFTA to USMCA

By Illinois AgriNews

The United States and its two closest trade partners, Canada and Mexico, have signed on to a revamped North American Free Trade Agreement.

The new United States-Mexico-Canada Agreement was announced by trade representatives Oct. 1 and awaits approval by Congress. It also will move through the Mexican and Canadian ratification process for final consideration.

“The great news of a new USMCA deal is important for our economy as a whole, including the agricultural sector, which counts Canada and Mexico in our top three trading partners. I have long said that I believe our country is located in the best neighborhood on Earth – North America – with valuable allies to our north and south,” said U.S. Agriculture Secretary Sonny Perdue.

“We have secured greater access to these vital markets and will maintain and improve the highly productive integrated agricultural relationship we have as nations.”

“While agriculture has generally performed well under NAFTA, important improvements in the agreement will enable food and agriculture to trade more fairly, and to expand exports of American agricultural products,” according to a release from the U.S. Trade Representative office.

Here are some key elements in the agreement impacting agriculture:

n U.S. dairy farmers will have new export opportunities to sell dairy products into Canada. Canada will provide new access for U.S. products including fluid milk, cream, butter, skim milk powder, cheese, and other dairy products. It also will eliminate its tariffs on whey and margarine.

n For poultry, Canada will provide new access for U.S. chicken and eggs and increase its access for turkey.

n All other tariffs on agricultural products traded between the United States and Mexico will remain at zero.

n The top priority for the U.S. dairy industry in this negotiation was for Canada to eliminate its program that allows low-priced dairy ingredients to undersell U.S. dairy sales in Canada and in third country markets. As a result of the negotiation, Canada will eliminate what is known as its milk classes 6 and 7. In addition, Canada will apply export charges to its exports of skim milk powder, milk protein concentrates and infant formula at volumes over agreed threshold, which will allow U.S. producers to expand sales overseas.

n For the first time, the agreement specifically addresses agricultural biotechnology to support 21st century innovations in agriculture. The text covers all biotechnologies, including new technologies such as gene editing, whereas the Trans-Pacific Partnership text covered only traditional DNA technology. Specifically, the United States, Mexico, and Canada have agreed to provisions to enhance information exchange and cooperation on agricultural biotechnology trade-related matters.

n Canada has agreed to grade imports of U.S. wheat in a manner no less favorable than it accords Canadian wheat, and to not require a country of origin statement on its quality grade or inspection certificate. Canada and the United States also agreed to discuss issues related to seed regulatory systems.

n To facilitate the marketing of food and agricultural products, Mexico and the United States agreed that grading standards and services will be non-discriminatory for all agricultural goods and will establish a dialogue to discuss grading and quality trade related matters.

Mexico and the United States agreed to not restrict market access in Mexico for U.S. cheeses labeled with certain names.

This article provided by NewsEdge.