USMCA Clears House

Senate Vote on Trade Agreement Likely to Follow Impeachment Trial

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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USMCA, after a year of waiting congressional action, was approved by the House of Representatives in a 385-41 vote on Thursday before the House recessed for the holidays. The trade agreement, which still must pass the Senate, is expected to boost agricultural exports by about $2.2 billion. (Public domain graphic)

WASHINGTON (DTN) -- A day after voting to impeach President Donald Trump in a partisan vote, the House of Representatives gave the president a significant trade victory by resoundingly passing the U.S.-Mexico-Canada Agreement with a large bipartisan majority.

In the final vote before walking out the door for the year, the House voted 385-41 to pass USMCA.

The trade agreement now moves to the Senate, where it will likely have to wait until after the Senate impeachment trial of President Trump before senators vote on USMCA.

Sen. Chuck Grassley, R-Iowa, chairman of the Senate Finance Committee, told reporters Wednesday he wanted to hold a traditional committee markup on the trade deal before it goes to the Senate floor. Grassley said the timing would be up to Senate Majority Leader Mitch McConnell, R-Ky.

Under impeachment "the only way the committees can meet and do business under the rules is by unanimous consent," Grassley said, adding he wants to get USMCA done fast, but the rules will likely slow it down a bit.

Canada and Mexico are top markets for most agricultural commodities. Under NAFTA, food and agricultural exports to Canada and Mexico grew from $9 billion in 1993 to nearly $40 billion in 2018. The USMCA is expected to boost U.S. agricultural exports by an additional $2.2 billion, according to an International Trade Commission report.

More than 900 agricultural groups had sent letters over the year supporting USMCA. American Farm Bureau Federation leaders called passage of the trade agreement the group's top priority.

"This trade agreement could not come at a more critical time for U.S. agriculture," said Zippy Duvall, president of AFBF. "Farmers and ranchers have been hit with a perfect storm of low commodity prices, weather disasters, trade disruptions and a severe downturn in the farm economy. The USMCA will provide continuity in the growth of the North American market and will strengthen our trading relationships with Canada and Mexico, which are our No. 1 and No. 2 export markets, respectively."

Last week, even the National Farmers Union board voted to back USMCA after changes were made to ensure stronger labor standards and remove extended patent protections for pharmaceutical drug companies.

Overall, USMCA is expected to boost U.S. exports over time by about $68 billion.

Kevin Paap, president of the Minnesota Farm Bureau, came walking out of the House visitor gallery just before House members were set to vote on USMCA. He noted Farm Bureau had been promoting the trade agreement for months.

"It's just a real honor to be in the Chamber to hear the debate and different testimonies from both sides," Paap said. "It just shows what farmers and ranchers have known for a long time, that working together works. Hopefully, they will continue to work together to get it through the Senate, and we will continue working with Canada and Mexico as part of North America to continue to push trade ... It's a great day for agriculture, though I'm a little disappointed with the RFS announcement. We have to keep our eyes on the ball on that as well because domestic demand is very important."

In a separate move, EPA also announced its final rule for RFS volume levels on Thursday, which disappointed supporters of biofuels.

During the USCMA floor debate, in contrast to the partisan rancor of Wednesday's impeachment vote against Trump, the USMCA House debate largely came down to which side could heap praise the most.

Rep. Jodey Arrington, R-Texas, credited the president, noting Trump was talking about changes to NAFTA during the 2016 election and he had followed through on those promises to hold trading partners accountable.

"Kudos to our president for his dogged commitment to an 'America First' trade policy," Arrington said.

Rep. James Comer, R-Ky., echoed Arrington and praised Trump, saying the president worked tirelessly with members of both parties.

"Make no mistake about it, the president's leadership on this issue has put us on the brink of this tremendous accomplishment," Comer said, adding that Kentucky alone will see an increase of more than $260 million in agricultural exports under USMCA.

Rep. Earl Blumenauer, D-Ore., said the original trade agreement did not deserve to pass, but a working group, including House Speaker Nancy Pelosi, D-Calif., worked with U.S. Trade Representative Robert Lighthizer, "who was a great partner working with us" to rewrite and strengthen the trade agreement.

Pelosi thanked Lighthizer for "being an honest broker and a straight shooter" with House negotiators. Pelosi said the original trade agreement would have sent more jobs to Mexico, but changes made in talks to increase oversight of labor enforcement in Mexico turned the tide on the deal.

"Now USMCA has some of the strongest labor enforcement provisions of any trade agreement," Pelosi said.

Rep. Michael Conaway, R-Texas, ranking member of the House Agriculture Committee, said he was glad the trade vote had arrived despite the impeachment process pushed by Democrats.

"Over the last year, Democrats obsessed over a partisan impeachment process while President Trump focused on securing the wins American farmers were counting on," Conaway said. "For our farm families, passing USMCA means an annual increase of $2.2 billion in agriculture exports, and we gain about 176,000 jobs."

Conaway added USMCA "resets our trading relationship with Mexico and Canada" by improving market access and removing market barriers. Conaway credited Trump, Lighthizer and Gregg Doud, USTR's chief agricultural negotiator.

"Our farmers and ranchers were counting on them, and they've delivered," Conaway said.

Rep. Glenn Thompson, R-Pa., cited the benefits of USMCA for dairy farmers by getting rid of the Class 6 and Class 7 dairy pricing schemes in Canada.

"This policy has unfairly limited our dairy export potential for years," Thompson said.

Dairy exports to Canada are expected to grow by roughly $300 million a year under changes in USMCA that provide more access to Canada. USMCA also ensures Europe cannot use geographical indicator labels to block U.S. dairy products, such as cheeses called "asiago" or "feta," from continuing to be labeled as such in Canada and Mexico.

Rep. Angie Craig, D-Minn., introduced as an "assertive advocate for this agreement," called it a win for Minnesota farmers and small-business owners.

"I've walked on farms across my district and with the families who feed, clothe and fuel this country," Craig said. "One thing is clear, years of tough prices, severe weather and trade issues have taken their toll. They need this trade agreement now."

Craig added she was proud to have worked "to eliminate the handouts to big pharma from the original agreement."

Rep. Xochitl Torres Small, D-N.M., said even if dairies in her state do not sell to Canada, the increased access will increase dairy prices nationally. She also said chili and pecan growers in her state would have more certainty under the trade deal.

Rep. Cindy Axne, D-Iowa, said the trade agreement gives market stability to farmers and prevents workers from having their wages cut, and also protects people from higher pharmaceutical costs.

"The same senators who blamed the House for not moving this forward fast enough are now stopping the USMCA from becoming law," Axne said. "Iowans and Americans are asking for help and we must get this deal done."

It was notable that Axne, Craig, Small and Rep. Abigail Spanberger, D-Va., all freshmen, were given speaking slots on the floor for Democrats, reflecting that they got a spotlight on USMCA that could help their reelection bids.

Rep. Dusty Johnson, R-S.D., said Thursday marked "a celebration that brings a bounty of benefits to a multitude of winners. If you are a dairy farmer, today you are a winner. If you are a middle-class family, today you are winner. If you grow wheat, if you write code, if you process cheese, you are winner today."

Chris Clayton can be reached at Chris.Clayton@dtn.com

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(AG)

Chris Clayton