United States-Mexico-Canada Trade Agreement (USMCA)

On Monday, October 1, Canada and the U.S. came to an agreement on the renegotiated North American Free Trade Agreement (NAFTA) that had been ongoing for more than a year.  The agreement, dubbed USMCA (U.S., Mexico and Canada Trade Agreement), contains issues of importance to the dairy industry.

“I’m pleased to see the U.S., Canada, and Mexico have successfully delivered a renegotiated NAFTA for consideration, and I am eager to review the details,” said enate Agriculture Committee Chairman Roberts. “Since 1994, when the original NAFTA went into force, the value of U.S. agricultural exports to Canada has increased by 271 percent and to Mexico by 305 percent. That is no small impact on rural America, as well as the American economy. This trade pact will provide our farmers and ranchers with much needed export market certainty and will strengthen the relationship with two of our most important trading partners.”

According to the Ottawa Sun, Prime Minister Justin Trudeau said it was a “good day for Canada” as he left a late-night cabinet meeting in Ottawa that capped several days of frenetic long-distance talks that included Foreign Affairs Minister Chrystia Freeland and U.S. Ambassador David MacNaughton.

Dairy Farmers of Canada’s statement showed their displeasure with the deal. ‘We have been informed of the conclusion of an agreement between Canada and the United States for a renewed free-trade accord. Granting an additional market access of 3.59% to our domestic dairy market, eliminating competitive dairy classes and extraordinary measures to limit our ability to export dairy products will have a dramatic impact not only for dairy farmers but for the whole sector. This has happened, despite assurances that our government would not sign a bad deal for Canadians. We fail to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood.’

U.S President Donald Trump praised the agreement, saying in a tweet the morning following the deal that negotiators had crafted a “wonderful new trade deal with Canada,” that “solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our farmers and manufacturers, reduce trade barriers to the U.S. and will bring all three great nations closer together.”

Skippy Duvall, President of the Farm Bureau Federation, said in a statement “Farm Bureau will review the details of the new treaty as they become available, but the elimination of Canada’s Class 7 dairy pricing program is a clear victory for our farmers. We also now have access to an additional 3.6 percent of Canada’s dairy market, which is even better than what we would have achieved under (the Trans-Pacific Partnership).”

Before the USMCA goes into effect, the agreement will require Congressional approval.