As harvesters rolled over U.S. fields, the Trump Administration announced Oct. 1 the birth of the U.S.-Mexico-Canada Agreement, or USMCA, the results of the renegotiated North American Free Trade Agreement.
The week prior, the administration championed a new agreement with Korea and negotiations for one with Japan progressed. A China trade deal remained locked in a tit-for-tat tariff battle with the U.S.
The details of the agreement were being vetted by U.S. agricultural interest groups and USMCA awaited Congressional approval. The initial general attitude among U.S. ag leaders, however, was one of optimistic relief as the uncertainty of what would become of NAFTA was alleviated.
“The National Cotton Council is extremely appreciative of the Trump Administration’s work to update and modernize the North American Free Trade Agreement, and our industry welcomes the conclusion of the negotiations,” said NCC Chairman Ron Craft, a Plains, Texas, ginner, in a prepared statement.
The NCC stated the agreement ensures “continued duty-free access for U.S. cotton to Mexico and Canada, with Mexico representing a top five export market for U.S. raw cotton. Both Canada and Mexico are top five export markets for cotton textile and apparel exports.”
"Farmers across the country have been closely following NAFTA negotiations and reminding the administration of its promise to 'do no harm' to agriculture,” said National Corn Growers Association President Lynn Chrisp, adding that NAFTA was “an unequivocal success story for American agriculture, opening markets that since enactment have become vitally important to U.S. corn farmers, and providing certainty to farmers and the rural economy.
“We applaud USTR for reaching a new agreement and look forward to thoroughly evaluating it to determine if it continues to benefit American agriculture."
Last year the United States exported $3.2 billion of corn and corn products to Mexico and Canada, NCGA stated, supporting 25,000 rural jobs. The U.S. Chamber of Commerce estimates that trade with Canada and Mexico supports 14 million U.S. jobs across many sectors
American Soybean Association President John Heisdorffer welcomed the new agreement with two of U.S. soybeans top destinations, the result of a NAFTA that worked well for U.S. soybean farmers. Under NAFTA, he said, U.S. soy exports to Canada and Mexico were almost $3 billion in 2017, and U.S. soy exports to Mexico grew four-fold under the agreement. Mexico is now the second largest export market for U.S. soybeans and meal. Additionally, roughly $43 billion of agriculture products are exported to Canada and Mexico every year.
“Our soybean harvest this year is large, and we are facing great uncertainty in China, so a modernized NAFTA is timely and beneficial for our farmers and rural communities,” he said.
“With USMCA, KORUS, and other agreements in sight, we are hopeful that a negotiated solution to the China tariffs could be near,” Heisdorffer said.
In a prepared joint statement, the National Association of Wheat Growers and U.S. Wheat Associates welcomed the move to update NAFTA.
“We are pleased the Administration recognizes the need for policy certainty with some of our top customers. While NAWG and USW must review the language of the new deal, we hope to see provisions that are positive for wheat farmers,” the statement said.
NAFTA was critical for U.S. wheat farmers dependent on the enormous Mexican market NAFTA built. NAWG and USW called for a fix to the Canadian grain grading system which automatically designates U.S. wheat as the lowest grade simply because it is foreign. This means U.S. farmers producing the highest quality wheat arbitrarily get less value for their crop.
“Farmers should understand that nothing has changed yet, but we are pleased to see that USTR has made progress on this issue, with Canada agreeing to grade imported wheat with the same requirements as Canadian wheat. We will follow the implementation of this commitment closely to ensure U.S. farmers can finally have reciprocal access to the Canadian market,” the wheat associations’ statement said.
Robert McKnight, Jr., president of the Texas and Southwestern Cattle Raisers Association, said, “Trade is vitally important to cattle producers who, on average, send more than $2 billion in U.S. beef exports to Mexico and Canada each year. We are extremely pleased to hear the new United States-Mexico-Canada Agreement will maintain the market access that has been so beneficial to U.S. cattle producers over the last decade. We look forward to swift approval by Congress and the certainty of a bright future with our trading partners.”