Issue at a Glance
On September 30, 2018, Canada joined the U.S. and Mexico in the successor to NAFTA, the U.S.- Mexico -Canada Agreement (USMCA). NAFTA removed barriers to intraregional trade, including agricultural products traded between Mexico and the U.S. and most agricultural products traded between the U.S. and Canada since it was implemented in 1994. Agricultural exports from the U.S. to Canada and Mexico increased from $8.9 billion in 1993 to $39 billion in 2017. The USMCA not only locks in market opportunities previously developed with our North American neighbors, but also builds on those trade relationships in several key areas.
Get the Facts: What’s New in This Deal?
- The USMCA will provide new market access for dairy and poultry products in Canada and maintains the zero-tariff platform on all other ag products and on all ag products to Mexico.
- Canada agreed to end its Class 7 pricing scheme.
- U.S. dairy products gain access to an additional 3.6 percent of Canada’s dairy market, a move that is even better than terms under TPP.
- Canada also agreed to treat wheat imports the same as domestic wheat for grading and pricing, and Mexico and the U.S. agreed that all grading standards for ag products will be non-discriminatory.
- This is the first FTA for the U.S. that includes measures that address cooperation, information sharing, and other trade rules related to biotechnology and gene editing.
- There are also provisions that 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 USMCA will be signed by the three countries on November 30, 2018. Congress can then consider the agreement.
AFBF coverage and market analysis of North American trade.