It’s official. President Trump formally signed the United States-Mexico-Canada Agreement (USMCA) Wednesday, marking the final step here in the U.S. on a three-way trade deal he called a “colossal victory” for farmers.
Attention now turns to Canadian lawmakers who are expected to begin the USMCA ratification process as a replacement to the 25-year-old North American Free Trade Agreement, within the next few months, according to reports.
Mexico’s Senate approved the trade deal in June 2019. Once approved by Canada, the agreement would take effect in 90 days.
Under terms of the new trade deal, U.S. agricultural exports are expected to increase by $2 billion and result in an overall increase of $65 billion in gross domestic product (GDP).
According to Michigan Farm Bureau’s National Legislative Counsel John Kran, USMCA, once ratified by Canada, will be good news for Michigan agriculture, particularly the state’s troubled dairy economy plagued with below cost of production prices over the last five years.
“This agreement will resolve a number of long-standing concerns and trade disputes, including the elimination of Canada’s controversial Class-7 for dairy products that allowed surplus milk from that country being dumped into U.S. markets, far below our domestic cost of production,” Kran said. “It also includes updated provisions for advancements in technology, such as bio-technology standards, for the first-time ever.”
Figures from the Michigan Department of Agriculture and Rural Development indicate $1.1 billion worth of exports already come from agriculture, with $902 million going to Canada and $174 million to Mexico.
Today’s signing increases “optimism” for all American farmers, said American Farm Bureau Federation President Zippy Duvall.
“We’re grateful for the advances, but we’re also realists eager to see results – especially for our dairy and wheat producers,” Duvall said in a statement. “We know it will take time for the new deals to go into effect and translate into increased sales … (but) we’re eager to get back into the full swing supplying safe, high-quality food and agricultural products around the world.”
The formal signing of USMCA comes on the heels of a string of trade successes, including the phase-one agreement with China signed last month and the U.S.-Japan Trade Agreement signed last fall.
“Today is a good day for American agriculture,” said U.S. Ag Secretary Sonny Perdue.
“Throughout this process, there were many detractors who said it couldn’t be done,” Perdue continued. “But this is further proof that President Trump’s trade negotiation strategy is working. This agreement shows the rest of the world the United States is open for business.”
Perdue said USMCA is critical for America’s farmers, increasing market access to the country’s two closest neighbors. “I am excited to see the economic benefits of this agreement increase the prosperity of all Americans, especially those living in rural America,” he concluded.