The signing of the U.S.-Mexico-Canada Agreement to replace the North American Free Trade Agreement is seen as a positive by most U.S. farm groups, but there are some reservations.
While the agreement still needs legislative approval in each of the three countries, groups representing farmers and ranchers were quick to weigh in with a flurry of press releases.
Zippy Duvall, president of the American Farm Bureau Federation, said the agreement will continue the progress U.S. farmers and ranchers have made since NAFTA was signed in 1994, which increased U.S. agricultural exports from $8.9 billion to $39 billion.
“That boost provided important markets for farmers and ranchers whose productivity has only grown since the agreement was signed,” he said.
The new agreement keeps all those gains and adds improvements for U.S. poultry, eggs, dairy and wine, he said.
But as good as that news is, U.S. farmers and ranchers still face retaliatory tariffs over steel and aluminum disputes with Canada, Mexico and other trading partners, he said.
“We urge the administration to redouble its efforts to come to an agreement on those outstanding issues so we can regain the markets we had not long ago,” he said.
Farmers for Free Trade believes USMCA is in the best interest of farmers and rural communities but also believes negotiating an end to the tariffs is just as important, Brian Kuehl, FFT executive director, said.
“Signing USMCA is a significant win for American farmers, but it’s a win that comes with a big caveat,” he said.
While the agreement offers exciting opportunities for market access, any gains will continue to be offset by the losses U.S. farmers are experiencing from retaliatory tariffs, he said.
Through September of this year, U.S. agricultural exports have faced more than $1.1 billion in new tariffs from Canada and Mexico and those exports have decreased 21 percent, he said.
“We hear from farmers and ranchers from Wisconsin to Texas to Washington state that these tariffs are blunting any momentum that USMCA might bring,” he said.
National Farmers Union said that while the agreement makes important improvements over NAFTA, it doesn’t go far enough to institute a fair trade framework and restore U.S. sovereignty.
“For decades, family farmers have taken a backseat to corporate interests in international trade negotiations. If allowed to take effect without changes, USMCA will continue this trend,” Roger Johnson, NFU president, said.
The agreement does make improvements to eradicate the dispute settlement system that gives corporations an unwarranted advantage over citizens, but it maintains that system for some oil and gas companies, he said.
It’s also the first U.S. trade agreement to include rules on currency manipulation, but those rules lack the teeth they need to be effective, he said.
USMCA also ignores the sovereignty lost in NAFTA, particularly with respect to food labeling. Canada, Mexico and multinational meatpackers pressured Congress to scrap country-of-origin labeling for beef and pork that benefitted U.S. consumers and producers, he said.
NFU is urging Congress to demand the administration makes changes to USMCA before ratifying the agreement.