July 27, 2020

New Trade Agreement

USMCA Enacted July 1, 2020

The United States-Mexico-Canada Agreement (USMCA), the replacement for the North America Free Trade Agreement (NAFTA), became active on July 1, 2020. USMCA was signed into law on January 29, 2020, by President Trump after receiving bipartisan support in Congress.

President Trump released a statement regarding the enforcement of the USMCA, stating, “the strong and overwhelming support the USMCA received from both parties in Congress—as well as from labor unions, business organizations, and champions of agriculture—shows just how much this trade agreement will benefit all Americans.  Hundreds of thousands of jobs will be added to the economy.”

The USMCA key provisions include increasing dairy market access by expanding market opportunities in Canada, biotechnology to support innovation and reduce trade-distorting policies, instituting a more rigorous process for establishing geographical indicators and lays out additional factors to be considered in determining whether a term is a common name, sanitary and phytosanitary measures to strengthen disciplines for science-based measures that protect human, animal, and plant health, expanding access of poultry and eggs to Canada, increasing wheat trade, and avoiding technical barriers to trade through non-discrimination and transparency regarding the sale, distribution, labeling, and certification of wine and distilled spirits.

United States Department of Agriculture (USDA) Secretary Sonny Perdue says the USMCA is a “huge win for agriculture.”

“America is located in the greatest neighborhood on earth, with Canada and Mexico as some of our top trading partners. In 2019, our nation exported more than $40 billion worth of agricultural products to Canada and Mexico, including billions of dollars’ worth of corn, soybeans, pork, beef, and processed foods, as well as agricultural heavy equipment. USMCA creates more market access for farmers from across our nation to sell their wholesome and nutritious products to our closest neighbors. This is a better deal for America that will grow our economy and put more money in the pockets of American families,” said Perdue, in an op-ed.

The USMCA builds upon existing markets to expand U.S. food and agricultural exports and support food processing and rural jobs. Canada and Mexico are America’s first and second-largest export markets for food and agriculture products, totaling more than $39.7 billion food and agricultural exports in 2018. These exports support more than 325,000 American jobs, according to the USDA press release.