Farm groups react to ITC report on USMCA
-The Hagstrom Report
A range of farm groups said Friday that the International Trade Commission’s report on the U.S.-Mexico-Canada Agreement on trade proved that Congress needs to approve the agreement even if the report did not cover the full benefits U.S. agriculture has found under the North American Free Trade Agreement.
Brian Kuehl, co-executive cirector of Farmers for Free Trade, the bipartisan coalition supported by American ag commodity groups, said, “The true benefit that USMCA delivers for American farmers is certainty and stability.”
“Especially right now, American farmers need a victory. USMCA will guarantee that their most important export markets remain open for business and free from red tape,” Kuehl said.
“While the ITC report is an important step in the process of considering trade agreements, the benefits of North American trade are already well understood, particularly by farmers and ranchers. Under NAFTA, ag exports to Canada and Mexico, grew from $8 billion in 1993 to $40 billion last year.”
The American Soybean Association said, “The report is a good tool, yet it does not account for valuable non-tariff provisions in the ‘new NAFTA’ — or look back historically on the myriad benefits to agriculture since NAFTA’s inception.”
ASA President Davie Stephens, a soy grower from Clinton, Kentucky, said, “USMCA builds upon the strong foundation set by the original NAFTA”
“Under NAFTA, the value of agricultural exports to Canada and Mexico increased to roughly $43 billion each year. Soybean exports to Mexico quadrupled under NAFTA, making Mexico the number two market for U.S. soybeans, meal and oil. We also saw a doubling of soybean exports to Canada, making it the number four market for soybean meal and the number seven market for soybean oil.”
Stephens continued, “We know that the modernizations included in USMCA will make trade with our North American neighbors even smoother. These non-tariff enhancements include the highest enforceable sanitary and phytosanitary (SPS) standards of any trade deal to date, an enforceable biotechnology chapter that supports 21st century innovations, and create a rapid response mechanism to address trade challenges. These provisions not only serve to update the North American agreement but set a paradigm for future free trade agreements.”
National Corn Growers Association (NCGA) President Lynn Chrisp said, “The release of the ITC report is an important step in moving USMCA toward congressional action.”
“ITC reports typically measure the economic impact of new trade agreements and focus on market access. USMCA is different — it’s an update to the North American Free Trade Agreement, which already eliminated most tariffs on exports of U.S. food and agriculture products.
“So, the ITC report released today doesn’t fully capture the economic benefits of trade with Canada and Mexico, nor the improvements to trade rules in USMCA that benefit agriculture.
“NAFTA has been a resounding success for agriculture. In 2016 alone, American corn growers exported $3.2 billion in corn and corn co-products to Mexico and Canada. USMCA secures and builds upon this important partnership, which is why ratifying USMCA is so important for agriculture.”
National Pork Producers Council Vice President Nick Giordano said, “NPPC supports ratification of USMCA, an agreement that preserves zero-tariff access to markets that represent more than 30 percent of total U.S. pork exports.”
“We are eager to see the removal of U.S. metal tariffs that prompted Mexico’s 20 percent retaliatory tariffs nearly a year ago. Members of Congress have said that ratification of USMCA will be delayed and the benefits of the agreement diluted as long as this trade dispute goes unresolved.”
Giordano added, “The value of U.S. pork exports to Mexico are down 32 percent this year due to punitive tariffs. Our farmers need zero-tariff trade restored to our largest export market.”
NPPC has designated USMCA ratification as a “key vote,” and will closely monitor support of the agreement among members of Congress. U.S. pork exports to Mexico and Canada support 16,000 U.S. jobs, the group said.
National Association of Wheat Growers President Ben Scholz, a farmer from Lavon, Texas, said, “It is critical for Congress to understand how substantial USMCA is for agriculture, especially the undervalued wheat market.”
“As the International Trade Commission report just assesses the USMCA agreement as compared to the status quo (NAFTA), in which U.S. wheat farmers already have free market access, it doesn’t fully capture the importance of USMCA.
“Once NAFTA was implemented, U.S. wheat exports to Mexico shot up to an annual average of almost 3 million metric tons (more than 100 million bushels). This made Mexico the largest U.S. wheat importer in the world in the 2016/17 marketing year
“Additionally, USMCA captures the original intentions of NAFTA while improving some of the provisions for wheat growers. It retains tariff-free access to imported U.S. wheat for our long-time flour milling customers in Mexico. Furthermore, the USMCA makes important progress towards more open commerce for U.S. wheat farmers near the border with Canada by working to fix the broken grain grading system and making trade more reciprocal along the U.S.-Canadian border.
“The ITC report is not reflective of vast benefits USMCA will bring to agriculture. A vote for USMCA means more jobs for Americans, stronger export markets for farmers to sell their crop, and billions of dollars added to the economy.”
International Dairy Foods Association President and CEO Michael Dykes said the report determines that USMCA “would likely have a positive impact on all broad industry sectors within the U.S. economy,” and that the U.S. agricultural and food exports will increase by $2.2 billion.
For dairy, the ITC expects exports of U.S. dairy products to increase by more than $277 million overall — rising $227.0 million to Canada and $50.6 million to Mexico, respectively.
“We believe the USMCA is a big win for the U.S. dairy industry and this report confirms that fact,” Dykes said. “The next step is for Congress to swiftly take up the agreement and vote to pass the USMCA.”
U.S. Dairy Export Council President and CEO Tom Vilsack said, “We shipped $1.4 billion in dairy products to Mexico last year, which accounts for more than one-fourth of U.S. dairy exports.”
“Without a trade treaty with Mexico in place, the dairy industry would be hard pressed to maintain and expand these sales, as our competitors in Europe are expected to implement a lucrative new trade arrangement with Mexico by next year.
“Moreover, without USMCA we lose out on the new rules this deal puts in place such as key reforms to Canada’s dairy system. Congress must pass USMCA to shore up our market in Mexico and harness the gains made in other areas through USMCA.”
In addition to increases in tariff-rate quota access for dairy products to the Canadian market, Canada will remove a controversial milk pricing scheme that disadvantaged American businesses, impose new disciplines on its dairy pricing programs and Mexico will update the way it treats imports of common-name food products like parmesan and swiss cheeses that could face trade roadblocks, USDEC said.
“When examining USMCA’s benefit to the economy, we believe it is important to keep the full picture in mind of what’s at stake here,” said National Milk Producers Federation President and CEO Jim Mulhern.
“USDA recently reported that our country lost an average of seven dairy farms a day in 2018 due to the poor economic conditions in rural America. That’s a startling number, and reversing this alarming trend is what we should be discussing. USMCA helps put us on a path to doing that by safeguarding our largest export market and instituting valuable new improvements to dairy trade in North America.”
The Business Roundtable, a broadly based group, said, “This comprehensive analysis shows that all broad industry sectors across the U.S. economy will benefit from USMCA.”
“Business Roundtable will continue to work with Congress and the administration to pass implementing legislation for USMCA this year to preserve and strengthen the $1.4 trillion in trade and over 12 million American jobs that depend on trade with Canada and Mexico.”