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Ag groups eye USMCA benefits

The long-disputed U.S. Mexico Canada Free Trade Agreement goes into effect today and ag groups say updates will greatly benefit the sector.

American Farm Bureau says the agreement is expected to increase U.S. ag exports by $2 billion annually and overall increase gross domestic product by $65 billion.

The agreement will increase U.S. dairy product quotas in Canada and treat wheat imports the same as domestic wheat for grading purposes. Science-based trading standards have also been enhanced among the three nations.  AFBF says the agreement is not a magic bullet for all the challenges facing agriculture and points to Mexico gaining ground in imports of produce and the need for a more level playing field for fruit and vegetable growers.

The head of the International Dairy Foods Association says USMCA is a big deal for the industry as it represents nearly half of U.S. dairy export markets. Michael Dykes tells Brownfield he’s confident Canada will uphold the terms of the agreement when it comes to dairy provisions and he is grateful trade officials took the opportunity to understand concerns of the industry. “Dairy, poultry, and eggs were left out of the original NAFTA so bringing those into the USMCA and negotiating changes to some of those longstanding policies were very important to our industry,” he says. Dairy groups are closely watching how Canada honors the agreement as recently announced tariff rate quota allocations discourage high-value food service or retail products from entering the Canadian market.

The National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) say benefits of the agreement now rely on robust enforcement measures to ensure Canada and Mexico are held accountable to their trade commitments.  USMCA also establishes new protections for products that rely on common cheese names.  If implemented as negotiated, U.S. dairy exports are projected to increase by more than $314 million a year and bolster dairy farm revenue by an additional $548 million over the first six years of implementation.

National Association of State Departments of Agriculture (NASDA) CEO Barb Glenn says the implementation could not have come at a more needed time as maintaining open markets is essential for North American countries to continue to recover from the impacts of the coronavirus pandemic.

U.S. Grains Council (USGC) chairman Darren Armstrong they will continue to work within the industry and with Canadian and Mexican corn, sorghum, barley, co-products, and ethanol customers to ensure the needs of the U.S. grains sector are met and the agreement builds on past successes with NAFTA.

American Soybean Association President Bill Gordon, a Minnesota farmer, says 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 another positive for the ag industry.