Agricultural groups may intensify their support of the new U.S.-Mexico-Canada trade agreement following President Donald Trump’s State of the Union Address.
Minutes after the speech in which Trump urged passage of USMCA, the U.S. Apple Association issued a statement calling on Congress to ratify it to replace the North American Free Trade Agreement.
U.S. Apple also called on the administration to remove steel and aluminum tariffs on Canada and Mexico so USMCA can be successful.
“Mexico and Canada are top export markets for apples, totaling nearly a half-billion dollars in annual sales. We support ratification of USMCA. It is good for apples as it maintains duty-free access and other important provisions from NAFTA including dispute resolution,” said Jim Bair, U.S. Apple president and CEO.
U.S. Apple was one of 46 organizations, many of them agricultural, that signed a Jan. 23 letter to Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer supporting USMCA and asking the steel and aluminum tariffs be lifted.
“For many farmers, ranchers and manufacturers, the damage from the reciprocal trade actions in the steel dispute far outweighs any benefit that may accrue to them from the USMCA,” the groups wrote.
Continued tariffs means “ongoing economic hardship,” the letter states.
“USMCA is in the best interest of U.S. agriculture and most commodity groups support it. The Northwest Horticultural Council will strongly advocate for ratification once the enabling legislation is introduced in Congress,” said Mark Powers, president of Northwest Horticultural Council.
“American Farm Bureau Federation will be working for passage of USMCA along with other agricultural and business groups,” said David Salmonsen, AFBF senior director.
Josh Rolph, federal policy manager for the California Farm Bureau Federation, said he’s not privy to any well-organized agriculture effort to support USMCA but suspects there soon will be one.
“For the most part, agriculture wanted the administration to do no harm. It did no harm and some good making it harder for phytosanitary issues to be used as trade barriers and there’s greater access for dairy into Canada. It’s NAFTA-plus for ag,” Rolph said. CFBF endorsed USMCA last October.
The tariffs are “wearing thin in the Midwest and out West we feel the pain and it can only last for so long. The administration wants to see some victories soon. USMCA could be one of those in the spring or summer,” he said.
There’s a level of “understanding, trust and hope” on the tariffs that won’t last beyond summer, he said.
The administration has not made a strong case why the tariffs on Mexico and Canada are still in place, he said. They seem like a bargaining chip, he said.
Senate Finance Committee Chairman Charles Grassley, R-Iowa, has reportedly said he won’t allow USMCA legislation on the Senate floor unless Trump scraps the tariffs.
So far Democrats are concerned about enforcement of labor and environmental provisions of USMCA and some Republicans are concerned about dispute resolution language.
“A question is whether Democrats can give Trump a win,” Rolph said.
“For most of agriculture and certainly for apples, NAFTA was the best trade deal in history. We quadrupled our exports to Mexico and doubled our exports to Canada,” Bair said.
USMCA is too important for Congress not to ratify it and the tariffs must be removed, either before or after ratification, for it to be successful, he said.
“I won’t handicap the odds of congressional ratification, but a future without free trade in North America is too terrible to contemplate,” Bair said.