BUENOS AIRES, Argentina — The leaders of the United States, Canada and Mexico on Nov. 30 signed a new trade agreement, a development that US President Donald Trump called “a truly groundbreaking achievement.”
The USMCA pact is largely a modernization of the nearly 25-year-old North America Free Trade Agreement (NAFTA).
The signing of the trade agreement is largely ceremonial, because it will still need to be ratified by all three countries before it can formally take effect. It still must be approved by the US Congress — a potential challenge for Trump because Democrats take control of the House in less than five weeks. Also, a new Mexican president takes over on Dec. 1 who might not honor the tentative deal struck by his predecessor.
Reaction to the agreement from the agricultural sector has been mostly positive.
The American Feed Industry Association (AFIA) expressed its support of USMCA, calling on Congress to approve the deal “for the betterment of the US animal food industry.” The association cited the United States’ dependence on free-trade in the feed ingredients, feed and pet food markets, which it says have tripled since the implementation of NAFTA, and said the USMCA will facilitate greater market access, regulatory transparency and accountability among the three countries.
“It is now in Congress’ hands to pass the USMCA,” said AFIA President and CEO Joel G. Newman. “I encourage our country’s leaders to demonstrate to the world that the US has entered a new era of trade agreements - one that is built on groundbreaking provisions, which increase transparency between the United States and its trading partners while rewarding science and innovation that continues to help today’s industries meet the needs of tomorrow’s consumers.”
Tom Sleight, president and chief executive officer of the US Grains Council, issued a statement following the signing, calling it “an important step in the new pact’s final approval and the processing of modernizing the most important trade agreement to US grain farmers and exporters.”
“In the latest marketing year, Mexico and Canada again proved to be top buyers of US feed grains in all forms, and both countries still hold significant potential for market expansion given the right trade policy frameworks and the robust market development we intend to undertake there with our partners,” he said. “We applaud the many members of the Trump administration, as well as their Mexican and Canadian colleagues, who worked diligently to negotiate this agreement. We see its forward movement as a sign our countries will continue our robust relationship, as business partners and friends.”
Speaking before the US International Trade Commission on Nov. 15, Randy Gordon, president and CEO of the National Grain and Feed Association (NGFA), said the agreement would bring about several significant advancements in facilitating the trade of grains, oilseeds and their derived products in the North American marketplace.
“The NGFA and NAEGA (North American Export Grain Association) are pleased USMCA maintains and expands current agricultural market access and preserves the dispute-settlement process for antidumping and countervailing duty cases, while modernizing the agreement to address the challenges of 21st century global trade,” said Gordon, who was speaking on behalf of both the NFGA and NAEGA.
While the Canadian dairy industry expressed displeasure with the deal that will increase its competition, the Canadian grain industry, including Cereals Canada, struck a positive tone.
Cam Dahl, president of Cereals Canada, said the USMCA will modernize the agreement in crucial areas, including new chapters on biotechnology and new plant breeding techniques, bringing the agreement up to date with modern technology.
“USMCA also sets the stage for equal treatment by the Canadian grading system for farmers on both side of the Canada/US border,” he said. “Again, this is a modernization that addresses issues that did not exist when the original NAFTA was drafted.”