The United States, Canada and Mexico have reached a trilateral trade deal that will replace the North American Free Trade Agreement (NAFTA).
“Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st century: the United States-Mexico-Canada Agreement (USMCA),” the U.S. Trade Representative’s office said in a joint statement with Canadian Foreign Affairs Minister Chrystia Freeland. “USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region. It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.”
One month ago, U.S. President Donald Trump announced that the U.S and Mexico had reached a “trade understanding,” but Canada was not mentioned in the announcement.
The deal will give the U.S. greater access to the Canadian dairy market, which reportedly was one of the sticking points of negotiations.
The deal is expected to be signed by all three governments by the end of November.
Agriculture groups react
The National Grain and Feed Association (NGFA) and North American Export Grain Association (NAEGA) commended the Trump administration and its counterparts in Mexico and Canada for reaching a trilateral trade agreement.
“Given the integrated nature of the North American economy, including within the food and agricultural sector, it was extremely important to reach a trade agreement that included all three countries,” said NGFA President and CEO Randy Gordon and NAEGA President and CEO Gary Martin in a joint statement. “The announcement of a new U.S.-Mexico-Canada Agreement (USMCA) represents a significant, positive step in modernizing and further enhancing North American food and agricultural commerce that has and will continue to benefit economic growth and consumers in this hemisphere, and further enhance investment and food security.”
NGFA and NAEGA said they looked forward to working with all three governments as part of the review and ensuing implementation of the agreement.
“Our industry is encouraged about reports that the final agreement takes steps to modify some existing impediments to agricultural trade, including dairy, and will preserve some form of the trilateral Chapter 19 tariff dispute-settlement mechanism contained in the North American Free Trade Agreement,” the statement said.
The NGFA and NAEGA also said they were particularly pleased by what they understand to be several efforts to preserve and enhance current trade terms in North America that were agreed to initially between the United States and Mexico. These include: the retention of zero tariffs on agricultural products traded between the United States and Mexico; the addition of 21st century language to enhance information exchange and cooperation on agricultural biotechnology trade-related matters; an agreement to strengthen disciplines for science-based sanitary and phytosanitary (SPS) measures to facilitate trade; and an agreement that grading standards and services on agricultural products, including grains and oilseeds, will operate independently from domestic registration systems for grain and oilseed varieties. Concerning SPS measures, the NGFA and NAEGA said they particularly were pleased by the inclusion of a provision – advocated by both groups – that would commit the three countries to provide notification of any adverse SPS import issues within five days, versus the seven days that had been agreed to under the Trans-Pacific Partnership Trade Agreement from which the United States withdrew.
Farmers for Free Trade (FFT) said American farmers are relieved that a deal has been reached, but urged removal of tariffs on agricultural products.
“Farmers across the U.S. are relieved that a deal with their top trading partners has been achieved,” FFT said in a press release. “The North American market is critical to the sustainability and economic prosperity of the U.S. agricultural industry as well as Main Street America. The true measure of success will be the day when our markets regain full trading status. That’s why we will continue to urge the immediate removal of tariffs that are taxing American ag exports and making farming more expensive, including the U.S. imposed steel and aluminum tariffs on Canada and Mexico.”
