The previous North American Free Trade Agreement (NAFTA) was dismantled in the summer of 2018. Leaders from the US, Mexico and Canada agreed to and signed a draft of the new USMCA deal in November 2018, but it has taken more than a year since then for it to pass into law.
The House of Representatives voted to pass USMCA late last month, and the Senate overwhelmingly voted in bipartisan favor of it on Thursday, 89-10. Mexico has already ratified the agreement, and Canada is expected to consider it soon.
The USDA has ensured that all food and agricultural products that had zero tariffs under NAFTA will remain at zero tariffs. USMCA will also create new market access opportunities for US exports to Canada of dairy, poultry and eggs, including a requirement that Canada eliminate its Class 6 and 7 milk pricing.
The International Trade Commission projects that under USMCA, US dairy exports will increase by more than $314m a year.
US dairy reacts
Brody Stapel, president of Edge Dairy Farmer Cooperative, said, “With USMCA having now reached the finish line, we should celebrate this as a landmark victory not only for dairy farmers and processors but for our country as a whole.
“Mexico and Canada account for 40% of all US dairy exports - a value of $2bn each year and tens of thousands of American jobs. USMCA will not only keep us from losing ground in these critically important markets but will also bring opportunities to increase market share.”
The US Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) praised the vote, but also advised the Trump Administration to ‘carefully monitor’ Canada’s and Mexico’s commitments once the deal takes effect and enforce all provisions so the dairy industry can ‘reap the full benefits.’
Tom Vilsack, president and CEO of USDEC, said, “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.
“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.”
Jim Mulhern, president and CEO of NMPF, said, “America’s dairy farmers are celebrating today’s bipartisan vote as a win. The US 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.”
John Rettler, president of FarmFirst Dairy Cooperative, said, “Today’s resulting vote in the Senate showcases a strong bipartisan support for this modern trade agreement and ultimately strong support to get US dairy products to be exported to our neighbors to the north and south.
“Getting to this point with USMCA has been no small feat. We extend our appreciation to our US Trade Ambassadors and congressional leaders who have made this a priority.”
Jeff Lyon, general manager of FarmFirst Dairy Cooperative, said, “In addition to reforming Canada’s controversial dairy pricing system, the USMCA also establishes new protections for products that rely on common cheese names, such as parmesan and feta.
“There is still work to be done. We are grateful for the hard-fought details that are part of this agreement, however, we would be remiss to not monitor implementation of this agreement to ensure it is being enforced in full and that US dairy is reaping the full benefits.”