Impact of COVID-19 on Agriculture

USMCA

Credit: AFBF 

Issue at a Glance

With the implementation of the U.S.-Mexico-Canada Agreement, U.S. farmers and ranchers are eager to realize the more than $2 billion in additional farm exports and $65 billion in gross domestic product the pact is expected to provide. The three countries signed the USMCA, the successor to NAFTA, on Nov. 30, 2018, and a revised version of the agreement was signed Dec. 10, 2019. With all three countries having ratified the agreement, USMCA will enter into force on July 1, 2020.

Ratification by Congress

The U.S. House of Representatives approved the USMCA on Dec. 19, 2019, the Senate approved the agreement on Jan. 16, 2020, and President Trump signed the implementing bill on Jan. 29, 2020.

“This trade agreement comes at a critical time for farmers and ranchers. USMCA is an important step toward restoring the competitiveness of America’s farmers and ranchers, strengthening our trade relationships in North America and setting an example for agreements with other important trading partners,” American Farm Bureau President Zippy Duvall said in a statement.

AFBF President Zippy Duvall at the Rally for Passage of USMCA on Sept. 12, 2019.

Key Points

  • Designed to replace the North American Free Trade Agreement, the USMCA builds on important trade relationships in North America.

  • The agreement is expected to increase U.S. ag exports by $2 billion and result in a $65 billion increase in gross domestic product.

  • The agreement will provide new market access for American dairy and poultry products while preserving the zero-tariff platform on all other ag products.

  • In particular, the agreement gives U.S. dairy products access to an additional 3.6% of Canada’s dairy market – even better than what was proposed in the Trans-Pacific Partnership trade agreement.

  • U.S. wheat will be treated more fairly, thanks to Canada’s agreement to grade our wheat no less favorably than its own.

  • Mexico and the United States have also agreed that all grading standards for ag products will be non-discriminatory.

  • Additional provisions enhance science-based trading standards among the three nations as the basis for sanitary and phytosanitary measures for ag products, as well as progress in the area of geographic indications.

  • The agreement also includes measures that address cooperation, information sharing and other trade rules among the three nations related to agricultural biotechnology and gene editing.

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