Panelists at an Atlantic Council event Tuesday pointed to several areas of ag trade in North America the updated NAFTA should enhance.
Under Secretary for Trade and Foreign Agricultural Affairs Ted McKinney and National Pork Producers Council Director of International Affairs Maria Zieba hailed the agriculture provisions of the U.S.-Mexico-Canada Agreement (USMCA) as an important advancement in the North American trading relationship.
Speaking during an event at the Atlantic Council co-sponsored by Politico, Zieba said the result of negotiations maintained the Trump administration’s promise to do no harm, noting that the continuance of zero tariffs on and maintenance of market access of U.S. pork exports to Canada and Mexico are important.
“Where we’ve really had to fight is where we have an uneven playing field, and that’s usually through non-tariff barriers to trade and not necessarily on tariffs,” Zieba said. “It’s usually a country basing their decisions to not accept U.S. products and U.S. pork, specifically, because of how we raise our pigs, which isn’t based on any science. It’s just based on a gut feeling that they don’t like it.”
Speaking before Zieba’s statement, McKinney pointed to new sanitary/phytosanitary (SPS) provisions in the agreement, which clarify “the kind of rigor that science requires” to ensure USMCA members don’t erect trade barriers.
Also under the new agreement, U.S. wheat farmers have greater access to new markets, McKinney said.
“Wheat on one side of the border in North Dakota was considered ‘feed grade,’ and the same wheat one mile into Canada was ‘food grade,’ and let me tell you, there is a difference in price,” he said. “That’s not very fair.”
The U.S. gained modest additional market access for products including dairy and wheat exports, but the “real bonus” are the new SPS and biotech provisions, which will have long-term impacts on North American trade, he said.
McKinney noted an entirely new chapter on biosciences, including new language on gene editing, which includes “great promise” for disease management in crops or other problems in livestock and/or poultry products, he said.
U.S. dairy farmers had been getting “hammered” by a Canadian milk pricing policy that resulted in Canada dumping dry milk powder and butter on the world market, before U.S. and Canadian negotiators were able to agree to language to modestly expand Canada’s market for U.S. dairy exports and to set rules for the future so “those kinds of things are kept in check,” McKinney said.
International Dairy Foods Association CEO Michael Dykes during a hearing at the International Trade Commission Nov. 15 expressed cautious optimism that new USMCA provisions would bode well for U.S. dairy exports, but expressed concern that Canada could simply not fill milk import quotas it agreed to during USMCA talks, noting that it routinely leaves unfilled several World Trade Organization quotas for milk protein substances and natural milk constituents.
Speaking to American Shipper after the Atlantic Council discussion, McKinney said that the U.S. Department of Agriculture and Office of the U.S. Trade Representative will have an “important role” in ensuring that Canada fills those import quotas, noting he believes Canada is well aware that the U.S. government will closely monitor Canada’s implementation of the new provisions.
“Our sense is [Canada] made a commitment to fill their quotas. It would sort of be contrary … to the spirit of free, fair and reciprocal trade if they don’t honor that and the other points of the agreement,” McKinney said. “We’ll see what happens, but our hope and our expectation is that they will follow through on the commitments they made: Fill the quota. Stop the dumping. Let us have access. Honor … geographic indicators.”
He added, “Time will clearly be the determinant.”
Notwithstanding dairy talks, McKinney noted that Canada and Mexico are “good friends” of the U.S. and are “aligned” in “so many ways,” including philosophically.
Speaking during the address, Jason Marczak, director of the Atlantic Council’s Adrienne Arsht Latin America Center, said that USMCA will be easier to pass through the Canadian and Mexican legislatures than it will be to pass through U.S. Congress.
He noted that the Mexican congress generally is supportive of the deal and that concerns among Canadian lawmakers regarding the deal largely boil down to the fashion in which USMCA might pass U.S. Congress.
“Not that there couldn’t be roadblocks along the way, but it’s a much more likely and easier ratification in both of those countries,” Marczak said.
McKinney said he hopes the U.S. Congress finds USMCA in its current form as an “acceptable package,” noting that post-negotiation tweaks to a trade deal could be another country’s “heartburn.”
“The hope is that the negotiations with the consultation that has taken place will suffice,” he said. “So we’ll keep our fingers crossed. All I know is this is a big damn deal, and I hope it does go through.”
Parties to the USMCA are expected to formally sign the pact on Friday during the G20 summit in Buenos Aires, setting the stage for each country to put the deal through their respective ratification processes.
USMCA ‘a big damn deal’ for U.S. agriculture industry
