WASHINGTON, DC. — On July 1, 2020, the United States-Mexico-Canada Agreement (UMSCA) officially replaced the North American Free Trade Agreement (NAFTA).
The United States, Mexico and Canada concluded negotiations for a new trade agreement to replace NAFTA in September 2018 and on Jan. 29, 2020, US President Donald Trump signed the new trade deal. Mexico passed the agreement in June 2019 and Canada approved the deal on March 13, 2020.
Under the USMCA, all food and agriculture products that have had zero tariffs under the NAFTA will continue to enjoy zero tariff access to the partner nations’ markets.
“Today marks the beginning of a new and better chapter for trade between the United States, Mexico and Canada — just as President Trump promised he would deliver for the American people,” said Robert Lighthizer, US Trade Representative. “The USMCA contains significant improvements and modernized approaches that will deliver more jobs, stronger worker protections, expanded market access, and greater opportunities to trade for companies large and small. We have worked closely with the governments of Mexico and Canada to ensure that the obligations and responsibilities of all three nations under the agreement have been met, and we will continue to do so to ensure the USMCA is enforced.”
Many US agriculture associations support the implementation of the new trade deal.
“We are entering into a new era of trade with Canada and Mexico — one that allows US animal food producers to remain competitive, strengthens our regulatory engagement and commitments with our trading partners and lays the groundwork for innovation to meet the agriculture industry’s future needs,” said Constance Cullman, president and chief executive officer of AFIA. “I commend our countries’ national leaders, particularly the efforts of President Trump and his administration over the past three years, for making this much-needed agreement a reality.”
Pet Food Institute (PFI) issued a statement applauding the completion of USMCA.
“With the implementation of the USMCA, US pet food makers can expect continued business certainty and market access across North America,” said Dana Brooks, president and chief executive officer of PFI. “The continuation of tariff-free access to our top trading partners, as well as the implementation of modernized, science-based provisions, help ensure a stable market for years to come. As the voice of US pet food makers, PFI celebrates this new achievement and appreciates the efforts of US negotiators on behalf of US food and agriculture producers and exporters.”
According to PFI, Canada and Mexico represent the first and third largest export markets for the United States, accounting for more than $855 million in exports in 2019, which is over half of the country's total exports.
The National Grain and Feed Association (NGFA) also support the strengthened trade measures the USMCA offers as well as future framework for other trade agreements.
For grains, oilseeds and their derived products and animal food, the USMCA, “preserves and strengthens market access while providing effective new mechanisms and safeguards to resolve sanitary and phytosanitary (SPS) issues that in the past periodically have disrupted trade,” said Randy Gordon, president and CEO of NGFA. “But the accord’s longest-lasting and most important impact may well be the solid framework it provides for the United States to negotiate significant new trade agreements with other countries, including Japan, Vietnam, the United Kingdom, Kenya and other nations on the African continent.”
The US Grains Council (USGC) approved of the future promises the USMCA holds.
“This agreement solidifies our country’s most important and strategic trade relationships with our best customers and promises further economic growth in tandem with our most-valued partners — Mexico and Canada,” said Darren Armstrong, chairman of the USGC. “We appreciate the administration’s hard-won efforts to deliver and implement an agreement that includes significant improvements and offers more modern approaches to trade and we thank our partners in both Canada and Mexico whose efforts have been equally appreciated and fruitful.”
The American Soybean Association (ASA) is pleased with the stability the new agreement provides the soybean industry and future growth.
“USMCA is a win for US soybean farmers and the American economy, as it restores certainty and stability to two important export markets for our farmers and lays a foundation for future growth,” said Bill Gordon, president of the ASA. “In addition to securing the Mexican market as the second largest importer of US soybeans, the terms agreed to by Canada will increase US poultry and dairy exports, which is another positive for the ag industry.”
The US Wheat Associates (USW) and the National Associates of Wheat Growers (NAWG) are encouraged by the leveling of the playing field.
As part of USMCA the Canadian Grain Commission amended its Canada Grain Act and Canada Grain Regulations, which now allow US grown wheat to be brought across the border to Canadian grain elevators to be graded on a level playing field. To qualify, US producers will need to grow wheat varieties registered in Canada’s Variety Registration System.
“A completed USMCA finally gets us past the uncertainty, and that is welcome news to US wheat growers,” said Doug Goyings, chairman of USW. “Especially as we now see an opportunity for US negotiators to take this as a gold standard agreement and launch negotiations with other countries, where US wheat growers face tariff and non-tariff barriers.”
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