While it may take some time to see the impact of the revamped free trade deal between the United States, Canada and Mexico in Whatcom County, one short-term result Monday was a stronger Canadian dollar.
The Canadian dollar, also known as the loonie, ended Monday at 78 cents compared to the U.S. dollar. That’s the strongest the Canadian currency has been compared to the U.S. dollar in four months.
The new trade deal, reached late Sunday night, will be called the United States-Mexico-Canada Agreement, or USMCA. If approved by all three countries it will replace the 24-year-old North American Free Trade Agreement.
While the trade agreement helped strengthen the loonie, rising oil prices and other factors also have boosted the Canadian dollar, said Steven Globerman, an international business professor at Western Washington University, in an email to The Bellingham Herald.
Other factors, such as the U.S. raising interest rates, will determine what happens with the loonie in the coming months, he said.
The removal of uncertainty gave the Canadian dollar a nice boost on Monday, said David Schneider, a vice president at Waycross Investment Management Company in Bellingham, in an email. That momentum could push the loonie to the 80-cent range in the next few months, he said.
A stronger Canadian dollar usually means an increase in cross-border shopping in Whatcom County; a weaker loonie translates to better deals for Americans in British Columbia.
The new trade agreement could impact Whatcom County in a number of ways.
One key difference: the USCMA would allow U.S. dairy farmers more access to the Canadian market, particularly with milk powder. Skim milk powder is one of the products produced at the Darigold facility in Lynden, much of which is shipped to Asia.
Most of the milk processed at the plant comes from co-op members in Whatcom and Skagit counties.
On Monday afternoon, Darigold President and CEO Stan Ryan issued a statement saying the company was grateful that the U.S. was looking out for the American dairy industry with this latest agreement.
“Dairy trade with Canada was one of the most difficult and contentious negotiating issues to solve in the entire USMCA deal,” Ryan said in the statement.
The new trade agreement will come up for review every six years.
Schneider said it’s important the agreement remain viable as Canadian companies consider setting up operations in Whatcom County to serve the U.S. market.
“The longer it is in place, the more it means for long-term investment in Whatcom,” Schneider said.
This article provided by NewsEdge.