MINNEAPOLIS — The U.S.-Mexico-Canada Agreement should have a positive effect for farmers and other businesses on both sides of the border, says the Canadian consul general for the upper Midwest.
Ariel Delouya serves in the Candian Consulate in Minneapolis, covering the Dakotas, Minnesota, Iowa and Nebraska. The USMCA, moving through the approval process, “reinforces the long-standing cooperation and partnership that exists between food processors, producers on both sides of the border,” he says, adding, “We have a very integrated sector in terms of ag, whether it’s shipment of piglets from Manitoba to places like Iowa, for fattening and processing eventually.”
Conversely, there is a lot of shipment of processed foods and beverages from those states.
Steven Buchta is the Canadian consul and trade commissioner covering agriculture.
“I think one of the benefits that was achieved for all three countries was improved language on a science-based approach to agriculture, including biotechnology,” Buchta says. “It was an opportunity for all three countries, as leaders in using science in agriculture, to have provisions and a regulatory framework agreed-to in the agreement, or protocols to communicate on those matters spelled out as well as possible.”
Canada has an embassy in Washington, D.C., but also a mission in New York, a liaison office in San Diego, with consulates in 17 major cities, including Minneapolis. A consulate helps facilitate trade between Canada and partners in the area states. Officials help companies on both sides evaluate opportunities and regulations.
Delouya says that since the North American Free Trade Agreement, predecessor to the USMCA, was approved in 1994, agricultural trade among the three countries has tripled, further linking a market of 480 million people. Thirty U.S. states count Canada as their top export market. Three of the biggest ag trade states are Minnesota, with $1.3 billion in annual trade, and North Dakota, $900 million; and South Dakota, about $300 million.
To compare, overall U.S-Canada trade accounts for about $2 billion a day in every sector and every service — about $800 billion a year in bilateral trade.
One of the big “asks” in the USMCA by U.S. agriculture was greater access to Canada markets for dairy, poultry and eggs, which had to be reconciled with Canada’s supply management — permits and quotas in those areas. The Canadians agreed to eliminate a couple of their dairy product classifications, involving milk protein supplements and infant formula.
A USMCA provision also improves the grain grading standards.
‘Entry into force’
Changes will come into effect six months after the “entry into force” of USMCA.
The U.S. House now has approved it. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, announced Dec. 20 that he’ll lead a markup of its ratification on Jan. 7, the first day the Senate will be in session in 2020. Senate Majority Leader Mitch McConnell, R-Ky., has said the Senate won’t consider it until after the impeachment trial of President Donald Trump.
Mexico ratified the agreement last June and now will have to re-approve it with the latest changes.
Canada had an election in October and were working their way through approving the USMCA. Now it has to be re-introduced in a new Parliament, where it is expected to pass.
Delouya says that “giving credit where credit is due,” he emphasized it was Trump who “really wanted to get to a new deal that was more in line with current trade realities between the three countries.”
Issues like digital trade weren’t important when NAFTA was approved in 1994, but are now.
It includes labor and environment provisions important particularly in the U.S. and Canada.
“There are some enforceable provisions that make the agreement a little more ‘toothy,’” Delouya says, as well as manufacturing. He says the agreement is in force for 16 years, subject to review every five years.
“It gives us — consumers, businesses, investors, farmers — predictable environment in which to operate going forward. At least now the lay of the land is clear with respect to market access in the case of farmers and producers. That’s good news.”