Former Ag Secretaries stand "shoulder to shoulder" on support for USMCA
Former U.S. Secretaries of Agriculture spanning six presidential administrations going back to President Ronald Reagan, are standing in solidarity in support of the United States-Mexico-Canada Agreement (USMCA).
During a USDA press conference, former Secretaries John Block, Dan Glickman and Tom Vilsack, enumerated the benefits of the trade deal between its neighbors Canada and Mexico, and how ratification of the agreement would add momentum in finalizing pacts with other global trading partners.
In a letter to Congressional leaders, former Secretaries representing both GOP and Democratic administrations — Block (Reagan), Mike Espy and Glickman (Clinton), Ann Veneman, Mike Johanns and Ed Shafer (W. Bush), along with Vilsack (Obama) —underscored the importance of passing USMCA saying, “We need a strong and reliable trade deal with our top two customers for U.S. agriculture products. USMCA will provide certainty in the North American market for the U.S. farm sector and rural economy. We strongly support ratification of USMCA.”
"It's not often that you can get four Secretaries of Agriculture in the same room, let alone in agreement on the same topic," said U.S. Secretary of Agriculture Sonny Perdue. "All of us know how important trade is to farmers and we've built a very productive environment in the U.S. by virtue of technology and genetics among many other things. Our farmers are productive and have built a supply chain that's really dependent on moving product offshore, and that means fair and open access to markets, especially when it comes to our neighbors and trading partners to the north and south of us."
Vilsack noted that 30% of what's grown, raised and harvested in the U.S. on any given year ends up in an export market. Canada and Mexico are the country's first and second largest export market for food and agricultural products, totaling more than $39.7 billion in 2018.
"Not only does that support farm income," Vilsack said, "but it helps to support a number of good paying jobs."
According to USDA data, exports support more than 325,000 American jobs.
Good deal for dairy
Vilsack says the agreement is a boon to dairy farmers who have been on the losing side of Canada's discriminatory pricing system. Canada's Class 6 and 7 milk pricing programs that allowed Canadian farmers to undersell U.S. producers would be eliminated under the USMCA .
"This is a pricing scheme that was established by Canadians to deal with an oversupply of powder that they had as a result of the world consuming a great deal more butter," Vilsack said. "Instead of dealing with this problem within their own supply management system, they decided to export the problem to the rest of the world. This certainly caused our dairy producers a lot of heartburn."
The deal also preserves the free flow of product over the southern border to Mexico, the top dairy market of the U.S.
"That billion dollars a year heading south is incredibly important," Vilsack said. "About 30% of all U.S. dairy exports go to Mexico and about 75% of all their imports come from the U.S. So, it's an opportunity for us to maintain and continue that strong market."
Vilsack pointed out that the USMCA provides a side agreement with Mexico that provides a listing of commonly used cheese names (geographical indicators).
"This is so our friends in Europe are not in a position to monopolize all those cheese names and thereby get an advantage in the marketplace," he said.
Enforceability, future trade
A sticking point among some lawmakers is whether or not the agreement is enforceable.
Dan Glickman, who served under President Clinton, voted for the passage of NAFTA in 1994. At the time, he said there were serious concerns raised about the enforceability of the provisions in place.
"However, the Mexican government has put in place statutes to deal with those issues. And in my judgement, the atmosphere for enforcement is much better than it was after NAFTA was passed," Glickman said.
Perdue said consequences have been built into the agreement that are fairly strenuous.
"We had that same fear when we negotiated our sugar agreement with Mexico back in 2017. And to their credit, Mexico has lived up to that," Perdue said. "And I think the same thing will happen here."
Glickman said ratifying the agreement is not only imperative for creating certainty among agriculture stakeholders but for future trade deals on the table.
"That uncertainty would be much worse if we didn’t get a trade agreement with our partners, our neighbors. Mexico and Canada. And, after all, if we can’t work it out with them then we can’t work it out with anybody," Glickman said.
While the U.S. has been able to maintain its marketshare in Mexico without a free trade agreement, Vilsack says that hasn't been the case overseas with U.S. competitors.
"That's whey we're anxious to have a free trade agreement with Japan," Vilsack said. "And if we don't get this agreement (USMCA) through, we will still face a very closed market in Canada."
Former Secretary Block who served under Ronald Reagan said ratifying a trade agreement with Canada and Mexico would help to build momentum moving forward.
"You have the Secretaries of Agriculture standing shoulder to shoulder saying to Congress, go ahead and pass this legislation. That's the first step," he said. "And then maybe we'll have some momentum to move forward on this trade agreement with Japan. And I can hope, that maybe the momentum will move us ahead with China."
Speculation that a U.S./China trade deal may be near grew as word spread of a Chinese trade delegation visiting the U.S. to tour farms in Montana and Nebraska. The cancellation of the trip, however, was not due to a failure in trade talks, according to a senior member of the delegation.
Han Jun, a vice-minister at the Ministry of Agriculture and Rural Affairs, told South China Morning Post that the agriculture portion of the talks were “very good” and the two sides had “sufficient and candid communications”.
A high-level Chinese delegation led by Vice-Premier Liu He, is expected to travel to Washington for talks next month.
Perdue said support for USMCA crosses all political parties, specifically when it comes to the agriculture community.
"I think in this city, agriculture is probably the least partisan issue that anyone can talk about," Perdue said. "And what you see here typifies the way that we hope Congress will deal with the issues of the document and the trade agreement rather than any of the political aspects."
Glickman said some will always find problems with various parts of the trade agreement.
"It's a good deal for America and a particularly good deal for farmers, especially during a vulnerable time that they're in right now," he said.