The probable ratification of the U.S.-Mexico-Canada Agreement (USMCA) will remove uncertainty from agricultural trade with America’s neighbors, agricultural experts say.
House Speaker Nancy Pelosi announced Dec. 10 that a bipartisan consensus exists in Congress to ratify USMCA, a replacement for the 25-year-old North American Free Trade Agreement (NAFTA). The three North American nations agreed to USMCA in September 2018, but political wrangling held up ratification until now.
During that period, the provisions of NAFTA remained in force, including those dealing with agricultural trade. The agreement on USMCA eventually led Mexico and Canada to remove tariffs on U.S. farm goods that they had put into place to retaliate against American tariffs on steel and aluminum. A spokesperson for the National Pork Producers Council told the Wall Street Journal that Mexico’s retaliatory tariff on American pork last year cut the price of hogs by an average of $12 a head.
USMCA doesn’t change the terms of farm trade significantly, but its ratification will reduce uncertainty in agricultural markets. U.S. farm exports are expected to rise 1.1%, mostly through slightly increased exports of dairy, poultry, wheat and alcohol to Canada. Ratification of USMCA became especially important because the Trump administration’s trade war with China has cut U.S. agricultural exports to that country in half.
