October 01, 2018

UPDATED: NAFTA-type deal reached that includes Canada

8 minute read

Canada has agreed to join the United States and Mexico in a trade deal that will replace the North American Free Trade Agreement, U.S. and Canadian officials said Sept. 30

“Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement (USMCA),” said U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland in a joint statement. “USMCA will give our workers, farmers, ranchers and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region.”

“It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home,” Lighthizer and Freeland added.

“We look forward to further deepening our close economic ties when this new agreement enters into force,” they said in crediting Mexican Economy Secretary Ildefonso Guajardo “for his close collaboration over the past 13 months.”

The U.S. had imposed a deadline of midnight Sunday with Canada to reach a new three-country deal.

The last-minute deal will provide U.S. with greater access to Canada’s dairy market, an issue that had been considered vital for U.S. dairy manufacturers, a senior administration official told reporters.

Agriculture Secretary Perdue responds

U.S. Secretary of Agriculture Sonny Perdue today issued the following statement regarding the announcement of a United States-Mexico-Canada Agreement (USMCA):

“The great news of a new USMCA deal is important for our economy as a whole, including the agricultural sector, which counts Canada and Mexico in our top three trading partners. I have long said that I believe our country is located in the best neighborhood on Earth – North America – with valuable allies to our north and south.  We have secured greater access to these vital markets and will maintain and improve the highly productive integrated agricultural relationship we have as nations. Notably, as one of the President’s top goals, this deal eliminates Canada’s unfair ‘Class 7’ milk pricing scheme, cracks open additional access to U.S. dairy into Canada, and imposes new disciplines on Canada’s supply management system. The agreement also preserves and expands critical access for U.S. poultry and egg producers and addresses Canada’s discriminatory wheat grading process to help U.S. wheat growers along the border become more competitive.

“As we celebrate this breakthrough, it is worth noting that there were many detractors who said it couldn’t be done.  But this is further proof that President Trump’s trade negotiation strategy is working. A renewed USMCA, a new KORUS agreement, and the continued progress with Japan, can lead to further deals with other trading partners like the European Union and China. The dominoes are falling and it is good news for U.S. farmers. I thank President Trump and our U.S. Trade Representative, Ambassador Lighthizer for their perseverance, leadership, and hard work.” 

FACT SHEETS

United Fresh reacts

“United Fresh is encouraged by the news that a revised tri-lateral agreement has been reached between the United States, Mexico and Canada. The strong relationships our members have established between these three countries have helped enable the growth of the fresh produce industry over the last quarter century. Coming on the heels of United Fresh’s annual Washington Conference and the inaugural Global Trade Forum in which this issue was front, and center and where attendees heard directly from key U.S. negotiators, the announcement of this revised agreement highlights the importance of our continued engagement on key policy issues by those in the produce industry. United Fresh looks forward to working with Congress to achieve the swift approval of this new agreement.”

Western Growers comment
Matt McInerney, senior executive vice president of Western Growers, issued the following statement:

“Over the weekend, the United States, Mexico and Canada reached an agreement to modernize and rebalance trade between the countries. The new United States-Mexico-Canada Agreement (USMCA) will enable food and agriculture to trade more fairly, and could help expand exports of American agricultural products. All food and agricultural products that have zero tariffs under the North American Free Trade Agreement (NAFTA) will remain at zero tariffs. Other achievements related to the fresh produce industry include:

Setting Standards for Agricultural Biotechnology

For the first time, the agreement specifically addresses agricultural biotechnology to support 21st century innovations in agriculture. The text covers all biotechnologies, including new technologies such as gene editing, whereas the Trans-Pacific Partnership text covered only traditional rDNA technology.

Commitments to Reduce Trade Distorting Policies, Improve Transparency, and Ensure Non-Discriminatory Treatment for Agricultural Product Standards

Building on NAFTA, the United States, Mexico, and Canada agreed to work together on agriculture matters, improve transparency and consultations on matters affecting trade among the countries.

Enhanced Rules for Science-Based Sanitary and Phytosanitary Measures

In the Sanitary and Phytosanitary (SPS) Measures chapter, the United States, Mexico, and Canada have agreed to strengthen disciplines for science-based SPS measures, while ensuring Parties maintain their sovereign right to protect human, animal, and plant life or health. Provisions include increasing transparency on the development and implementation of SPS measures; advancing science-based decision making; improving processes for certification, regionalization and equivalency determinations; conducting systems-based audits; improving transparency for import checks; and working together to enhance compatibility of measures. The new agreement would establish a new mechanism for technical consultations to resolve issues between the parties.”

 California Farm Bureau welcomes agreement

The newly revised North American Free Trade Agreement, renamed the U.S.-Mexico-Canada Agreement, promises to ease export of California-grown farm products, according to the California Farm Bureau Federation.

“The newly announced U.S.-Canada agreement, in combination with the earlier agreement between the U.S. and Mexico, strengthens relations with two key trading partners,” CFBF President Jamie Johansson said, “and we urge Congress to ratify the USMCA without delay.”

Johansson said the agreement will provide California farmers and ranchers with “much-needed certainty” in key export markets.

“We applaud the three governments for working to modernize the agricultural chapters in the agreement,” he said. “It’s a welcome development at a time when farmers have faced obstacles in selling their products to foreign customers.”

Canada represents the second-largest market for California agricultural exports, with sales of more than $3.3 billion in 2016 – the most recent year for which full statistics are available. Mexico is the No. 5 foreign market for California farm products, with sales of just more than $1 billion in 2016.

“Agricultural exports support thousands of jobs in California, both in rural areas where crops and commodities are grown and packed, and in urban centers from which products are marketed and shipped,” Johansson said. “We hope the agreements with Mexico and now with Canada lead to further easing of trade restrictions.”

The new agreements leave in effect Canadian and Mexican retaliatory tariffs on farm goods imposed after the U.S. placed tariffs on steel and aluminum imports. Johansson urged U.S. negotiators to reach agreements on those issues as soon as possible.

“We’ve seen California farmers, ranchers and agricultural marketers lose sales because of the retaliatory tariffs from Canada, Mexico and in particular from China,” he said. “Until those tariffs come off, farmers won’t see the full benefit of the new U.S.-Mexico-Canada agreement.”

The California Farm Bureau Federation works to protect family farms and ranches on behalf of nearly 40,000 members statewide and as part of a nationwide network of more than 5.5 million Farm Bureau members.

Produce Coalition for NAFTA applauds U.S.-Mexico-Canada agreement

 “On behalf of the Produce Coalition for NAFTA, we strongly commend the Trump Administration and the Trudeau Administration for reaching a significant agreement which will bring Canada into the U.S.-Mexico-Canada Agreement (USMCA). We sincerely appreciate the hard work of Mexican Economy Minister Ildefonso Guajardo in helping to ensure that this agreement was reached. This modernized trilateral trade agreement will enhance U.S. agricultural exports and build on the success of the NAFTA agreement that was put in place in 1994.

We commend U.S. Trade Ambassador Robert Lighthizer and Canada’s Minister of Foreign Affairs Chrystia Freeland for reaching an agreement which re-affirms and builds on the commitment to open trade in agricultural products, including fresh produce. The USMCA is a significant victory not only for agriculture but for the U.S. economy and U.S. consumers. We look forward to working with House and Senate Members to ensure ratification of this significant new trade agreement.”

The Produce Coalition for NATFA is made up of leading U.S. and Canadian fruit and vegetable companies that support efforts to modernize NAFTA, while maintaining duty-free access for produce among the NAFTA countries. The Produce Coalition for NAFTA believes important issues like border procedures, harmonization of regulations and the protection of intellectual property offer opportunities for real improvements in free trade.

To learn more about the Produce Coalition for NAFTA, visit http://producecoalitionfornafta.com/.

PMA pleased to see agreement 

Richard Owen, the vice president of Global Membership & Engagement of the Produce Marketing Association, issued the following statement regarding the conclusion of negotiations between the United States, Canada and Mexico to update the free trade agreement among the three countries:

“The members of the Produce Marketing Association are pleased that negotiators have concluded discussions on an updated United States-Mexico-Canada Agreement (USMCA) on trade.  A single agreement is the best way to address the extensive relationships and investments in produce and floral production and sales that have developed in North America.  This agreement is consistent with our overarching goals of free and fair trade and we hope that the new agreement will be quickly ratified by all three countries.

We are encouraged by the certainty that this new agreement provides to companies doing business in North America.  The 6-year review and 16-year duration of the agreement gives confidence for future investment to further build and expand trade among the countries as our members work to supply consumers’ expectations of a vast range of fresh produce and floral products year-round.  Some of our members sought provisions on seasonal products not included in the final agreement, and we appreciate commitments from negotiators to continue to examine opportunities to address their concerns.”

PMA is a trade association representing companies from every segment of the global produce and floral supply chain. PMA helps members grow by providing connections that expand business opportunities and increase sales and consumption. For more information, visit www.pma.com.

Canada group shows support

“The Canadian Produce Marketing Association (CPMA) is pleased that a new trilateral free trade agreement has been reached between Canada, Mexico and the United States. The United States-Mexico-Canada Agreement (USMCA) will ensure that the supply chains of the fresh produce industry remain integrated benefiting both Canadian producers and consumers.

“CPMA has been active over the past 13 months to promote the ongoing free trading environment for our industry within North America,” said Les Mallard, CPMA chair. “We are greatly appreciative of the hard work by Canadian negotiators to finalize the deal in a way that is not harmful to our sector.”

CPMA will be reviewing the details of the agreement, particularly those chapters related to sanitary and phytosanitary issues, dispute resolution, trade remedies, good regulatory practices, and competitiveness.

“CPMA looks forward to continued collaboration with Ministers Freeland and MacAulay on other key areas of trade which are focused on diversification and growth within the fresh produce industry,” said Ron Lemaire, CPMA president.

Seed group applauds agreement

The American Seed Trade Association (ASTA) applauds the news of a new trade agreement between the U.S. and its two largest export markets: Mexico and Canada.

“This trilateral deal is a win for the U.S. seed industry,” said ASTA President and CEO Andrew LaVigne. “We thank the administration for its efforts in reaching a strong agreement that fosters innovation and ensures robust science-based standards for the continued movement of seed with two of our most important trading partners.”

While ASTA is still reviewing the full details of the agreement, the association is pleased to see the language includes its core priorities for trade. Most notably, the agreement provides stronger support for agricultural biotechnology and the trait approval process; recognizes the importance of evolving plant breeding methods like gene editing; strengthens science-based sanitary and phytosanitary (SPS) regulations; and provides strong intellectual property protections, including adoption of UPOV 91 requirements.

The U.S. is the largest market for seed in the world and is also the largest seed exporter. Seed varieties can cross six international borders before they are commercialized. This movement is critical to bring the highest quality seed to producers. Without seed exports, U.S. companies would lose $1.7 billion in sales annually. Mexico and Canada are our two largest export markets and vital trading partners. Of the $1.7 billion in U.S. exports, these trading countries account for $600 million in annual exports and make up 57-percent of U.S. corn-seed export sales.”

 

 

 

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