In a nearly unified diverse panel before the Senate Finance Committee, those representing the agriculture, trucking, auto and labor industries said the U.S.-Mexico-Canada Agreement (USMCA) offers a better alternative than the previous North American Free Trade Agreement (NAFTA).
Tom Vilsack, former secretary of agriculture who currently serves as president and chief executive officer of the U.S. Dairy Export Council (USDEC), said, “Exports matter.” The International Trade Commission estimated that USMCA would allow for a $2 billion increase in U.S. agricultural exports.
His opening testimony detailed how Mexico and Canada represent 28% of all food and agricultural exports as well as thousands of jobs. “Ratification of USMCA matters to dairy farmers, as well as to egg, poultry, wheat and those involved in alcoholic beverages,” as all should receive increased access to Canada’s market, Vilsack said.
It also builds momentum for progress in other discussions with establishing new rules of the road on sanitary and phytosanitary measure as well as regulatory harmonization, Vilsack said, adding that it slows the further abuse of the European Union’s use of geographical indictors that has cost the dairy industry billions in dollars in lost revenue.
Corteva Agriscience chief executive officer Jim Collins testified, “The agriculture and food industry represents the largest segment of U.S. manufacturing jobs and 12% of the American economy. It is in our country’s best interest to stand by them and support the passage of the USMCA.”
In a statement following the hearing, Collins said, “Corteva supports USMCA as a tool to stabilize markets, further expand and modernize North American trade and increase grower and consumer access to innovation.”
Collins added that in all of his conversations with farmers, they stressed that trade is key to their success. He said agriculture’s future is dependent on the passage of USMCA and expressed strong support for the particular provisions related to regulatory harmonization of biotechnology and sanitary and phytosanitary measures that would prevent rejections or delayed seed shipments.
USMCA creates a process for regulators to more quickly share information and better collaborate on regulations of biotech crops, including new breeding methods, Collins said. This should alleviate trade barriers as well as decrease the time frames associated with approval to create a more coordinated regulatory framework in lockstep rather than sequentially.
“We need trade agreements to solve problems before they become disputes,” Collins said.
A delegation of House Democrats recently visited Mexico City, San Luis Potosi, and Tijuana to gauge just how serious Mexico is about implementing and enforcing new labor and environmental standards that the country promised as part of USMCA. Enforceability of labor standards remained the one sticking point offered by many Democrat members of the Senate Finance Committee during the hearing, as well as Michael Wessel, president and staff chair for the Labor Advisory Committee for Trade Negotiations & Trade Policy.
The Democrat members of Congress met with Mexico's President Andres Manuel Lopez Obrador, laborers and environmentalists and even toured a water treatment plant. “The Democratic members of the delegation specifically assessed how to ensure (USMCA) raises standards for workers and the environment, provides access to medicines and can be enforced,” according to a statement from the House Ways & Means Committee.
Negotiations continue between U.S. Trade Representative Robert Lighthizer and House Democrats to find a way to offer the implementing legislation and achieve final approval on USMCA by this fall.
Inaction causes uncertainty
Derek Leathers, president and CEO of Werner Enterprises who was representing the trucking industry, said inaction on USMCA increases business uncertainty. “Not knowing USMCA will be ratified makes it difficult to make decisions,” he said.
Collins said farmers often make decisions 12 months out when ordering inputs such as seed. He said having more certainty of where agricultural demand is going to come from within the global market really helps in that decision-making; USMCA passage would offer some certainty about what that market will look like.
Sen. John Thune (R., S.D.) said it's very problematic when farmers and ranchers are unsure of what the rules of the road will look like in the future. “The one thing we have in front of us that we can get done now to change that trajectory and bend it in the right direction is this agreement,” Thune said of USMCA. “We don’t need to wait on this anymore. We need to get it done.”
Ag community needs action
Not only have more than 1,000 food and agricultural groups signed a letter to Congress calling for USMCA ratification, but multiple groups have coordinated advocacy days in Washington, D.C., bringing thousands of farmers, ranchers, producers and food companies to Capitol Hill to advocate directly with their elected representatives. Last week, the U.S. Chamber of Commerce also raised the voices of the business community in support of USMCA passage.
The National Association of State Departments of Agriculture (NASDA) submitted written testimony for the Senate Finance hearing, also noting the need to pass USMCA to offer certainty to the struggling farm economy as well as free up resources for other trade agreements with Japan and China.
“Increased market access, streamlined customs procedures and enhanced standards for biotechnology are just a few of the improvements included in this 21st-century agreement. NASDA urges Congress and the Administration to bring the USMCA into force as quickly as possible. With ratification of the USMCA in the rearview mirror, the full force of the federal government can focus on tearing down trade barriers for U.S. agriculture around the world,” NASDA said in its comments.
National Milk Producers Federation president and CEO Jim Mulhern added, “Without USMCA, we lose out on $314 million in additional dairy exports. We also lose the benefit of the new rules this deal puts in place, such as key reforms to Canada’s dairy system and stronger safeguards for our cheese exports to Mexico.”
American Farm Bureau Federation president Zippy Duvall said in a statement following the hearing, “One message came through loud and clear from today’s hearing: It’s time to wrap up negotiations and ratify USMCA. Rarely, if ever, have we heard support from such diverse interests, recognizing the benefits of this agreement.”
Duvall applauded Sen. Chuck Grassley (R., Iowa) for holding the hearing and Lighthizer for his tenacity in moving the negotiations with Congress forward. “We urge those at the table to double down on finalizing implementation details, so this agreement can be quickly approved,” he said. “Farmers and ranchers are carrying the heaviest burden from the ongoing trade wars. We need USMCA now to strengthen relationships with our North American trading partners and improve access to these markets.”