House passing of Mexico-Canada agreement long overdue, a win for agriculture

The United States-Mexico-Canada Agreement (USMCA) passed the House of Representatives on Dec. 19, by overwhelmingly approving the sweeping trade deal with Mexico and Canada.

Lawmakers voted 385 to 41 to approve the USMCA, which puts in place rules for moving products among the three countries. The vote clears the way for the Senate to ratify the deal early next year.

The pact – a top legislative priority for Trump – was hailed as a victory for American farmers and workers and said it could serve as a model for trade agreements.

The trade pact will replace the North American Free Trade Agreement, or NAFTA, a nearly quarter-century-old accord that essentially eliminated tariffs on most goods traded among the three countries.

Trump relentlessly ridiculed NAFTA as the “worst trade deal ever” when he was running for president three years ago, arguing it put American workers at a competitive disadvantage.

The new agreement “is a vast improvement over the first version shown to us by President Trump and his team,” said House Majority Leader Steny Hoyer, D-Md.

Among the changes negotiated by Democrats are stronger provisions regarding the enforcement of labor and environmental standards. For example, the revised pact calls for monitors in Mexico City to make sure Mexico lives up to tough environmental laws, regulations and practices. A verification process will enable U.S. customs workers to block goods from entering the country if they have been produced in violation of those rules.

The trade agreement gives U.S. farmers greater access to Canada’s agriculture market, puts in place a new chapter for dealing with e-commerce, dictates that a higher percentage of autos be made from parts manufactured in North America and requires that at least 40% of vehicle production be done by workers earning at least $16 per hour.

Stricken from the final agreement was a provision that Democrats argued would have made prescription drugs more expensive and increased the time it takes for generic versions of brand-name drugs to be made available to consumers.

U.S Secretary of Agriculture Sonny Perdue pointed to the passage of USMCA as proof that support for the pact crosses political parties. 

“I am pleased the House finally brought this agreement to a vote and encourage quick passage in the Senate," Perdue said. "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.”

Rep. Mike Gallagher (R-WI) said the vote was long overdue after Speaker of the House Nancy Pelosi played "political games" with the agreement for more than a year "at the expense of hardworking Americans." 

“In an increasingly global economy, strong trade agreements are vital to Wisconsin farms and businesses," Gallagher said. "This agreement will be a substantial improvement over the status quo, and stands to support thousands of Wisconsin jobs, expand market access to Canadian and Mexican markets, particularly for our dairy farmers, and provide another jolt to an already strong economy."

Congressman Glenn Grothman (R-Glenbeulah) said the pact is “the 21st century solution we need to promote free trade, economic growth and continued cooperation between the United States, Mexico and Canada."

Wisconsin's dairy industry and entire agriculture sector will benefit from the new trade agreement, Grothman pointed out.  

"Additionally, the 231,000 Wisconsin jobs and nearly $11 billion worth of Wisconsin exports supported by trade with Canada and Mexico will be provided a better playing field," said Grothman. "The USMCA also repairs glaring holes in NAFTA that have, for too long, allowed China to penetrate North American markets."

Randy Romanski, Interim Secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) was glad progress is being made on the agreement and emphasized that DATCP's efforts to work with local, state and federal partners to open markets for Wisconsin's products and commodities will continue. 

“Wisconsin farmers have endured more than their fair share of challenges in the past several years, from low commodity prices to harsh weather. Trade uncertainty has had a significant impact on farmers’ bottom line as well," said Romanski. "I’m optimistic that the approval of USMCA by the Senate next year will provide some of the certainty and stability our agricultural businesses need and deserve.”

Several agriculture groups were quick to applaud the progress of the USMCA. 

John Rettler, dairy farmer from Neosho, Wis. and president of FarmFirst Dairy Cooperative called it a "great step forward for all three countries."

“This trade agreement is important for U.S. trade, most particularly dairy," said Rettler in a press release. "It is no secret that this trade agreement addressed several trade issues that have been concerning for U.S. dairy farmers, most notably the class 7 pricing issue and limited market access. It is great to share some good news for dairy farmers.”

Passage of the USMCA in the House of Representatives brings the agreement one step closer to the finish line.

“U.S. dairy is a real winner with this agreement, but our work is not done,” says Jeff Lyon, FarmFirst Dairy Cooperative General Manager. “We will work with our Senate leaders to ensure that this legislation continues to be a top priority going into 2020. We are optimistic that it will be swiftly passed when the time comes in the new year and that we can begin implementing it with our trading partners to the north and the south.”

“The leadership and support by our Upper Midwest members of Congress to get USMCA passed was fantastic,” says Lyon. “FarmFirst appreciates their recognition of improved trade policies and expanded market access which is critical for dairy farmers’ long-term success.”

The American Dairy Coalition (ADC) said the House approval is an important step forward in providing market stability for dairy producers across the nations.  

This agreement will provide valuable increased access to Canada’s dairy market. It is anticipated that this agreement will further U.S ag exports by $2 billion which will result in an estimated $65 billion increase in gross domestic product, according to ADC.

"We commend the efforts that brought the successful passage of USMCA in the House of Representatives. This marks a critical step in improving market access and building better trade relationships with Canada and Mexico. U.S. Dairy farmers can feel some increased security in this crucial agreement," said Laurie Fischer, American Dairy Coalition CEO.

The USMCA will bring key changes to Canada's pricing system for milk ingredients and opens the Canadian dairy market to increased U.S. exports. Further, the trade deal will strengthen the relationship with Mexico, according to ADC. It also establishes new securities for common cheese names, namely, safeguarding the continued use of multiple generic cheese terms such as parmesan and feta.

After months of agriculture and business groups rallying to ensure the House of Representatives would pass the “new NAFTA” before the fade of 2019," Bill Gordon, soy grower from Worthington, Minn., and American Soybean Association (ASA) president said the efforts showed that "great things can be accomplished with working in unison.”

Mexico is the #2 market for whole beans, meal and oil, and Canada is the #4 buyer of meal and #7 buyer of oil for U.S. soybean farmers, making the trade agreement essential to sustaining the growth realized in those two countries under the North American Free Trade Agreement (NAFTA). Under NAFTA, U.S. soybean sales to Mexico quadrupled and to Canada doubled, according to ASA.

National Corn Growers Association President Kevin Ross said corn farmers have been working toward this vote for nearly a year.

“All of agriculture should be incredibly proud to see these efforts pay off with such a strong, bipartisan vote," Ross said. "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."

Michael Collins of USA TODAY contributed to the article. 

Carol Spaeth-Bauer at 262-875-9490 or carol.spaeth-bauer@jrn.com. Follow her on Twitter at cspaethbauer or Facebook at https://www.facebook.com/carol.spaethbauer.