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Perdue: We've Waited Long for USMCA Passage
USAgNet - 01/17/2020

U.S. Secretary of Agriculture Sonny Perdue issued the following statement after the Senate passed the U.S.-Mexico-Canada Agreement (USMCA) by a bipartisan vote of 89-10.

"We've long waited for this day and now USMCA will finally head to the President's desk," Secretary Perdue said. "The passage of USMCA is great news for America's farmers and ranchers. With Congressional consideration now complete, our farmers and ranchers are eager to see the President sign this legislation and begin reaping the benefits of this critical agreement. I thank President Trump and Ambassador Lighthizer for successfully delivering an improved and modern trade agreement and working so hard for the people of American agriculture to get this deal across the finish line."

USMCA will advance United States agricultural interests in two of the most important markets for American farmers, ranchers, and agribusinesses. This high-standard agreement builds upon our existing markets to expand United States food and agricultural exports and support food processing and rural jobs.

Canada and Mexico are the United States' first and second largest export markets for United States food and agricultural products, totaling more than $39.7 billion food and agricultural exports in 2018. These exports support more than 325,000 American jobs.

R-CALF USA CEO Bill Bullard, however, said his members across the U.S. are not happy and claimed the interests of cattle farmers and ranchers are not protected.

"We are deeply disappointed that the U.S. Senate has ignored the interests of United States cattle farmers and ranchers by voting to extend the 25-year-old NAFTA agreement (North American Free Trade Agreement) under its new name, the USMCA.

"The USMCA makes no changes at all for the largest sector of American agriculture, the U.S. cattle industry. Importers of beef and cattle will continue to have 30% more inventories of cattle from which to source cheaper, undifferentiated cattle and beef and U.S. cattle producers are left without any ability to distinguish their superior product with a mandatory country-of-origin label. This means United States consumers will not be able to choose to support United States cattle farmers and ranchers.

"The combination of cattle and beef is the leading agricultural import from Canada and Mexico. We sell those countries less than $2 billion in cattle and beef each year and turn around and buy over $4 billion of the very same products.

"This persistent trade deficit has caused our U.S. cattle industry to shrink over the past 25 years. We now have fewer cattle producers, cattle, auction yards, feedlots and packers with which to start this new USMCA era. That means our industry now lacks the critical mass of competitive infrastructure it had when we entered NAFTA more than two decades ago.

"Because our industry now lacks the critical mass of competitive infrastructure to withstand the shock of the new USMCA, we should expect our industry to continue its contraction.

"We will now go to Congress to seek out members who share our concern that U.S. cattle producers have been rendered non-competitive under the USMCA because they have no means to distinguish their exclusively USA-produced beef from the cheaper, undifferentiated substitutes that will continue flooding our markets," ended Bullard.

On the other hand, U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom said, "The U.S. Senate moving quickly to approve USMCA reaffirms the United States' commitment to two key trading partners, both of which are very important destinations for U.S. pork, beef and lamb. USMEF applauds Congressional leaders and the Trump administration, especially the trade experts within USTR and USDA, for their tireless efforts to ratify USMCA, which bolsters our position as a reliable supplier to two leading markets that account for about one-third of all U.S. red meat exports. Shipments to Mexico and Canada in 2019 totaled about 1.25 million metric tons valued at $3.8 billion, and the U.S. red meat industry looks forward to many years of further growth."

All food and agricultural products that have zero tariffs under the North American Free Trade Agreement (NAFTA) will remain at zero tariffs. Since the original NAFTA did not eliminate all tariffs on agricultural trade between the United States and Canada, the USMCA will create new market access opportunities for United States exports to Canada of dairy, poultry, and eggs, and in exchange the United States will provide new access to Canada for some dairy, peanut, and a limited amount of sugar and sugar-containing products.

Earlier this year, nearly 1,000 American food and agriculture associations and companies announced their support for USMCA and the National Association of State Departments of Agriculture signed a letter to Congressional leadership urging them to ratify USMCA.

In September, all former U.S. Secretaries of Agriculture since President Reagan's Administration announced support for USMCA. In a letter to Congressional leaders, former Secretaries John Block (Reagan), Mike Espy (Clinton), Dan Glickman (Clinton), Ann Veneman (W. Bush), Mike Johanns (W. Bush), Ed Shafer (W. Bush), and Tom Vilsack (Obama) underscored the importance of passing USMCA saying, "We need a strong and reliable trade deal with our top two customers for U.S. agriculture products. USMCA will provide certainty in the North American market for the U.S. farm sector and rural economy. We strongly support ratification of USMCA."

"USMCA ratification is a bi-partisan accomplishment of historic proportions. That is for good reason. USMCA is critical to the modernization of North American trade and the future prosperity of American farmers, workers, and businesses. Also, pushing USMCA across the finish line will make America safer and more secure through strengthened relationships with our national neighbors," said Corn Refiners Association (CRA) President and CEO John Bode.

As a member of the USMCA Coalition, CRA has played a leading role in building grassroots support for this important trade agreement. Working in conjunction with other food industry leaders to promote advocacy efforts among food and beverage industry workers has resulted in nearly 15,000 letters to Congress urging USMCA ratification. The coalition, which represents farmers and ranchers, manufacturers, service providers and technology companies, includes more than 200 companies and associations.

U.S. corn refiners export over $2 billion in goods annually, adding $4.7 billion to the overall economy. With 15 percent of all U.S. refined corn products exported annually, and Mexico and Canada representing the two largest markets for refined corn products totaling more than $900 million in yearly exports, international trade is vital to the success of CRA members.

Key Provision: Increasing Dairy Market Access

- America's dairy farmers will have expanded market opportunities in Canada for a wide variety of dairy products. Canada agreed to eliminate the unfair Class 6 and 7 milk pricing programs that allowed their farmers to undersell U.S. producers.

Key Provision: Biotechnology

- For the first time, the agreement specifically addresses agricultural biotechnology -- including new technologies such as gene editing -- to support innovation and reduce trade-distorting policies.

Key Provision: Geographical Indications

- The agreement institutes a more rigorous process for establishing geographical indicators and lays out additional factors to be considered in determining whether a term is a common name.

Key Provision: Sanitary/Phytosanitary Measures

- The three countries agree to strengthen disciplines for science-based measures that protect human, animal, and plant health while improving the flow of trade.

Key Provision: Poultry and Eggs

- U.S. poultry producers will have expanded access to Canada for chicken, turkey, and eggs.

Key Provision: Wheat

- Canada agrees to terminate its discriminatory wheat grading system, enabling U.S. growers to be more competitive.

Key Provision: Wine and Spirits

- The three countries agree to avoid technical barriers to trade through non-discrimination and transparency regarding sale, distribution, labeling, and certification of wine and distilled spirits.

The U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) cheered the vote.

Looking ahead, USDEC and NMPF urged U.S. officials to carefully monitor Canada and Mexico's USMCA commitments once the trade deal takes effect to ensure its provisions are enforced accordingly so that the dairy industry is able to reap the full benefits of the agreement negotiated by Ambassador Lighthizer and the negotiating teams at USTR and USDA.

"USMCA makes important strides to break down trade barriers, opening the door to new opportunities and supporting the flow of high-quality American dairy products to two valuable export markets," said Tom Vilsack, president and CEO of USDEC. "The strong enforcement measures included in the final agreement give officials the tools necessary to hold our trade partners accountable and ensure the gains secured by USMCA are completely realized. We are grateful to the Administration for the sizable accomplishments secured in USMCA on dairy. With this trade deal complete, negotiators can now turn their attention to other key markets around the world in order to gain further ground for U.S. dairy."

"America's dairy farmers are celebrating today's bipartisan vote as a win. Under President Trump's leadership, USTR and USDA negotiated an agreement that will deliver a more certain future for our dairy farmers and rural economy," said Jim Mulhern, president and CEO of NMPF. "The U.S. must now remain diligent and proactively work with Canada and Mexico to implement USMCA in both letter and spirit. Full compliance is essential to achieving more fair trade with Canada and protecting American-made cheeses in Mexico."

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