USMCA Passage Critical to Preserve and Strengthen Dairy Export Markets

The U.S. International Trade Commission (ITC) released an economic analysis of the U.S.-Mexico-Canada Agreement (USMCA) today and dairy industry officials eager to see USMCA’s passage welcomed this key step in the trade agreement approval process.

 

 

Tom Vilsack, president and CEO of the U.S. Dairy Export Council, said the ITC study is important because it moves the USMCA process closer to ratification, a step urgently needed to secure trading conditions with Mexico and usher in the improvements the agreement makes for U.S. exports.

“We shipped $1.4 billion in dairy products to Mexico last year, which accounts for more than one-fourth of U.S. dairy exports,” he said. “Without a trade treaty with Mexico in place, the dairy industry would be hard pressed to maintain and expand these sales, as our competitors in Europe are expected to implement a lucrative new trade arrangement with Mexico by next year. Moreover, without USMCA we lose out on the new rules this deal puts in place such as key reforms to Canada’s dairy system. Congress must pass USMCA to shore up our market in Mexico and harness the gains made in other areas through USMCA.”

In addition to increases in tariff-rate quota access for dairy products to the Canadian market, Canada will remove a controversial milk pricing scheme that disadvantaged American businesses, impose new disciplines on its dairy pricing programs and Mexico will update the way it treats imports of common-name food products like parmesan and swiss cheeses that could face trade roadblocks.

“When examining USMCA’s benefit to the economy, we believe it is important to keep the full picture in mind of what’s at stake here,” explained Jim Mulhern the president and CEO of the National Milk Producers Federation. “USDA recently reported that our country lost an average of seven dairy farms a day in 2018 due to the poor economic conditions in rural America. That’s a startling number, and reversing this alarming trend is what we should be discussing. USMCA helps put us on a path to doing that by safeguarding our largest export market and instituting valuable new improvements to dairy trade in North America.”

The benefits of USMCA expand far beyond just dairy; the Food & Agriculture Dialogue on Trade also summarized the value of the agreement and the proper lens through which to examine the ITC report’s results. That document lays out why American Agriculture needs passage of USMCA noting for instance that: “uncertainty about NAFTA’s future threatens the North American market integration that has created and supports jobs for many U.S. food and agriculture producers.”