The House of Representatives has approved a United States-Mexico-Canada trade agreement and is closer to handing President Donald Trump with a signature victory as he sought to replace the North American Free Trade Agreement.
The House, on Dec. 19, voted to ratify the agreement and U.S. Congressman Roger Marshall, a Kansas Republican and member of the House Agriculture Committee said the passage of the trade agreement will be a victory for farmers, small businesses and manufacturers. The new agreement was approved on a 385 to 41 vote.
USMCA will be referred to the Senate Finance Committee before it is brought before the full Senate for a straight up or down vote, without amendments, according to a news release from Nebraska Cattlemen.
The agreement is expected to pass in early 2020.
“This deal delivers hundreds of millions of dollars in market opportunities for Kansas agriculture goods, streamlined supply chains for our small businesses, and thousands of new jobs for hard working Kansans,” Marshall said. “This deal has been far too long in the making but I look forward to President Trump signing this agreement so he can deliver on his huge promise to the American people. I want to thank all of the agriculture organizations, trade associations, and other industry groups who championed this effort and provided constant support throughout this endeavor.”
Canada and Mexico are Kansas’ top two trading partners with a combined $4 billion in exports in 2018 alone, according to Marshall. The USMCA is anticipated to produce $68 billion in economic activity.
U.S. Secretary of Agriculture Sonny Perdue issued the following statement after the House of Representatives passed the agreement.
“I’ve long said that support for USMCA crosses political parties, the bipartisan passage of the agreement today is proof of that,” Secretary Perdue said. “I am pleased the House finally brought this agreement to a vote and encourage quick passage in the Senate. President Trump delivered on his promise to replace NAFTA and USMCA is a huge success for America’s farmers and ranchers. This agreement will unleash the bounty of America’s agricultural harvest to two of our largest trading partners in the world and it is critical to the success of rural America.”
American Farm Bureau Federation President Zippy Duvall said the agreement will benefit agriculture.
“This trade agreement could not come at a more critical time for U.S. agriculture. Farmers and ranchers have been hit with a perfect storm of low commodity prices, weather disasters, trade disruptions and a severe downturn in the farm economy. The USMCA will provide continuity in the growth of the North American market and will strengthen our trading relationships with Canada and Mexico, which are our No. 1 and No. 2 export markets, respectively.
“We are hopeful that USMCA can be a model for future U.S. trade agreements, as these modernized rules will be a strong guide for addressing continuing issues. We urge the Senate to quickly approve the USMCA.”
Various agricultural groups offered their perspective to the advancement of the U.S.-Mexico-Canada Agreement.
National Cattlemen’s Beef Association President Jennifer Houston said,
“Today was a crucial win for all U.S. beef producers and a reassurance that U.S. beef will continue to have duty-free access to Canada and Mexico,” Houston said. “A big thank-you goes to the Trump Administration and every lawmaker who voted to approve USMCA. Of course, there is still more work left to do, so I urge the Senate to swiftly pass the USMCA and send it to the president’s desk.”
Trade agreements like the U.S. Mexico Canada Trade Agreement are critical to Nebraska’s economy, according to Nebraska Cattlemen, which applauded the vote. As the state’s No. 1 industry, beef cattle production had a $13.8 billion economic impact in Nebraska in 2018. USMCA keeps the highly successful framework for U.S. beef trade in place with our closest trading partners and brings much needed certainty to farmers, ranchers and rural communities after a challenging year. USMCA updates the North American Free Trade Agreement to reflect our modern economy, while preserving duty-free, unrestricted access for U.S. Beef exports to Canada and Mexico - worth roughly $1.8 billion.
“Nebraska Cattlemen applauds the passage of USMCA out of the U.S. House of Representatives. Nebraska leads the nation in commercial red meat production and depends on reliable, unrestricted access to our two closest trading partners, which totaled over $250 million worth of beef exports from Nebraska last year,” Ken Herz, president, Nebraska Cattlemen.
One cattle group did not
One livestock group believes the trade pact was a step in the wrong direction. Bill Bullard, president and CEO of R-CALF USA, said NAFTA in the past 25 years was destructive to the industry’s competitive marketing channels and the new agreement will make it worse.
“This means the passage of the USMCA will likely be the straw that breaks the camel’s back, and in this instance, the straw that breaks the one industry that is most important to America’s rural economy,” Bullard said.
Bullard explained that this is the reason the USMCA will have a far more disastrous impact on the U.S. cattle industry than was caused by the original NAFTA and renewed his call for reinstatement of mandatory-country-of-origin labeling for beef.
Bullard said that only with mandatory COOL can America’s ranchers even begin to compete with the growing volumes of price-depressing, cheaper and undifferentiated foreign cattle and beef that the USMCA will cause to be imported into the U.S. market.
Meanwhile, passage of USMCA was one of the top priorities for the National Pork Producers Council. NPPC’s highest trade priorities. “We can’t get it ratified through Congress fast enough,” NPPC President David Herring, a hog farmer from Lillington, N.C., said during an NPPC press briefing.
NPPC joined organizations in signing a letter to lawmakers, urging passage of USMCA. “USMCA is critical to our economic future because it will preserve and strengthen U.S. trade ties to Canada and Mexico. More than 12 million American jobs depend on trade with Canada and Mexico. U.S. manufacturers export more made-in-America manufactured goods to our North American neighbors than they do to the next 11 largest export markets combined, and the two countries account for nearly one-third of U.S. agricultural exports. Approval of USMCA will ensure U.S. manufacturers, farmers, and service providers can continue to access the Canadian and Mexican markets. The new pact guarantees that virtually all U.S. exports will enter these markets tariff-free,” the letter said. Last year, Canada and Mexico took over 40 percent of the pork that was exported from the United States and a similar percentage is expected this year. U.S. pork exports to Canada and Mexico support 16,000 U.S. jobs.
National Corn Growers Association President Kevin Ross said, “Corn farmers have been working toward this vote for nearly a year, sending emails, having meetings and making phone calls to their representatives in support of USMCA. All of agriculture should be incredibly proud to see these efforts pay off with such a strong, bipartisan vote. We wouldn’t be at this stage in the ratification process without the hard work of individual farmers across the country.”
Ratifying USMCA has been NCGA’s top legislative priority because Mexico and Canada are the U.S. corn industry’s largest, most reliable markets, he said.
National Sorghum Producers Chairman Dan Atkisson, a sorghum farmer from Stockton, Kansas, said, “USMCA provides a needed level of certainty for U.S. farmers and ranchers, and National Sorghum Producers appreciates the tenacity of our Administration, the Office of the U.S. Trade Representative and Congressional leaders to ensure American ag producers have a trade win to close out a very difficult year 2019. Passage in the House brings this deal one step closer to the finish line, and we encourage the Senate to follow early in the new year, so the agreement may be enacted as soon as possible.”
Soy growers, other agriculture and business groups have rallied collectively for months to ensure the House of Representatives would pass the “new NAFTA.”
“This is a win for soybean farmers and a win for the Administration and Congress. Their efforts to pass a free trade deal that can restore certainty and stability to an important export market for our farmers demonstrates that they can accomplish great things working in unison,” said Bill Gordon, soy grower from Worthington, Minnesota and ASA president. “We express our thanks to the House of Representatives for this momentous act. We now look to the Senate to take up and pass USMCA in early 2020.”
Mexico is the No. 2 market for whole beans, meal and oil, and Canada is the No. 4 buyer of meal and No. 7 buyer of oil for U.S. soybean farmers, making the trade agreement essential to sustaining the growth realized in those two countries under NAFTA. Under NAFTA, U.S. soybean sales to Mexico quadrupled and to Canada doubled.