Trump Signs USMCA Deal

President Says New Agreement Is 'Tremendous Breakthrough' for Agriculture

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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For agriculture, USMCA opens up more access for products such as dairy, poultry and wheat to Canada, and overall is expected to boost U.S. agricultural exports about $2.2 billion once fully implemented. (DTN file graphic)

OMAHA (DTN) -- President Donald Trump on Wednesday signed the United States-Mexico-Canada Agreement at a White House ceremony, allowing the president to highlight his trade successes and the overall strength of the U.S. economy even as the impeachment trial against him continues.

USMCA is a significant political victory for President Trump, who noted in his comments that his critics had dismissed the possibility of renegotiating the former North American Free Trade Agreement. Trump also pointed again to the phase-one China deal signed earlier this month.

"There has never been an administration that has done what we have done in the past three years," Trump said.

Trump is scheduled to hold a campaign rally Thursday evening in Des Moines, making a point to come to Iowa just days before the Democratic caucuses in Iowa on Monday evening.

USMCA is still waiting for ratification in Canada. The Canadian government just began the process of pushing for passage of the trade deal this week.

Under NAFTA, trade in North America has grown to about $1.3 trillion annually between the three countries. USMCA is projected to add about $68 billion in U.S. exports once fully implemented, which includes about $2.2 billion for U.S. agriculture.

The big winners in agriculture will come from increased exports to Canada of products such as dairy, poultry, eggs and wheat. Dairy sales to Canada are expected to grow about $229 million a year, while the president cited figures that poultry exports to Canada would increase by 50% and egg sales could increase as much as 500%.

"The agreement is a tremendous breakthrough for American agriculture," Trump said. He then said to Canadian officials in attendance on Wednesday, "You guys did a good job on us before this deal."

Once Canada ratifies the deal, U.S. wheat will also get reciprocal grading treatment, noted the U.S. Wheat Associates.

Looking more to Mexico, it accounted for $20 billion in purchases in 2018 and was the top market for U.S. corn, dairy, poultry and eggs, distillers dried grains and rice. Mexico was also the second- or third-largest market for 25 other commodities. Most products already received tariff-free access to Mexico under NAFTA.

The American Farm Bureau Federation said in a statement that USMCA "increases hopes that 2020 will begin a stronger decade for America's farmers and ranchers."

Zippy Duvall, president of AFBF, said, "There is definitely increased optimism on farms and ranches across America and we're grateful for the advances, but we're also realists eager to see results -- especially for our dairy and wheat producers. We know it will take time for the new deals to go into effect and translate into increased sales. We're eager to get back into full swing supplying safe, high-quality food and agricultural products around the world."

Leaders of several agricultural organizations were in attendance at the event Wednesday, including Kevin Ross, president of the National Corn Growers Association.

"This is a big win for America's farmers, our rural communities and the American economy," Ross said. "USMCA builds on our already successful trading partnership with Mexico and Canada. This agreement should serve as a template for opening the door to new market opportunities for U.S. corn."

At least eight leadership members of the National Pork Producers Council also attended the signing ceremony. Canada and Mexico accounted for more than 40% of pork exports in 2018 and a similar volume in 2019, NPPC noted.

"USMCA provides U.S. pork producers with certainty in two of our largest export markets and we thank President Trump and his administration for making USMCA a top priority," said David Herring, NPPC's president and a hog farmer from Lillington, North Carolina. "We look forward to implementation of a trade deal that preserves zero-tariff pork trade in North America."

Given the partisan divide in Washington, the White House invited congressional Republicans to the signing ceremony, but excluded Democrats. The White House had pressured House Speaker Nancy Pelosi, D-Calif., throughout most of 2019 to bring USMCA to the floor, but she pushed for tighter labor, pharmaceutical and enforcement standards in the agreement before agreeing to a vote in December. Those labor provisions got the AFL-CIO union to support the deal, as well as the National Farmers Union.

Roger Johnson, president of NFU, credited Pelosi's work in a statement on Wednesday.

"We are especially pleased to see significant improvements over earlier versions of this deal, including stronger labor, environmental, and enforcement provisions as well as the elimination of giveaways to the pharmaceutical industry," Johnson said. "These improvements are the direct result of many months of negotiations by Speaker Pelosi and House Democrats, for which we commend them."

The Senate passed USMCA earlier this month on an 89-10 vote after the House had passed the trade deal in December on a 385-41 vote.

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

Follow him on Twitter @ChrisClaytonDTN

(AG/ES)

Chris Clayton