USMCA modernizes dated NAFTA

Getty Images/iStockphoto Illustration of USMCA with U.S. Capitol in the background
Legislative Watch: USMCA now in effect; depopulation methods challenged; funding needed for ag border inspectors.

The long-awaited United State-Mexico-Canada Agreement which modernizes the 26-year-old North American Free Trade Agreement officially went into effect on Wednesday.

The passage of USMCA was one of the highest priorities of U.S. agriculture last year. Mexico and Canada were the No. 1 and No. 2 export markets for U.S. agriculture in 2019. These two countries account for approximately one-third of all U.S. red meat exports.

A key issue that Congress and the administration will be following is the enforcement of the auto, environmental and dairy provisions of the agreement. Other issues that will be closely monitored include the biotechnology, energy and intellectual property provisions of the agreement.

U.S. Trade Representative Robert Lighthizer in a statement on Wednesday says, "The USMCA contains significant improvements and modernized approaches that will deliver more jobs, stronger worker protections, expanded market access and greater opportunities to trade for companies large and small. We have worked closely with the governments of Mexico and Canada to ensure that the obligations and responsibilities of all three nations under the agreement have been met, and we will continue to do so to ensure the USMCA is enforced."

USTR this week explains its proposed procedure for how individuals or groups can file a labor complaint under USMCA in the Federal Register. The Department of Labor outlines how it will determine if a vehicle is meeting the USMCA's "labor value content" provision. USMCA requires that 40% to 45% of the content of a vehicle be made by workers earning a minimum of $16 per hour.

Key USMCA provisions for agriculture include:

  • Tariffs — Agricultural products that currently have zero tariffs under NAFTA will maintain zero tariffs under USMCA.
  • Dairy — The United States will gain greater market access to Canada's dairy market. Canada will eliminate its Class 6 and 7 dairy programs which will allow the United States to export more milk protein concentrate, skim milk powder and infant formula to Canada.
  • Poultry — Canada will provide new access for U.S. chicken and eggs and increased access for turkey.
  • Wheat — Canada agreed to grade imports of U.S. wheat in the same manner it grades Canadian wheat. Currently, U.S. wheat is graded at the lower priced feed grade.
  • Biotechnology — The agreement covers all biotechnologies, including new technologies such as gene editing.
  • SPS — The agreement strengthens the disciplines for sanitary and phytosanitary measures including increased transparency on the development and implementation of SPS measures; science-based decision making; improving processes for certification, regionalization and equivalency determinations; and provide for consultation to resolve issues between countries.

Even as we celebrate implementation of USMCA, there is growing tension between the United States and Canada. The Trump administration is threatening to reimpose a 10% tariff on imports of Canadian aluminum. If this happens we can expect Canada to retaliate.

Stop risky depopulation methods
A number of environmental groups and others are asking the USDA to restrict various disposal methods that farmers are using to depopulate their animals because of COVID-19. They are saying these methods could cause harm to the environment and the public. Also, they are asking that depopulation events be made public.

The groups have petitioned the Animal Plant Health Inspection Service to ban mass burials of euthanized animals in unlined pits and on-farm incineration of animal carcasses. They also want APHIS to publish a permanent and searchable database with information on where animal depopulation has occurred, methods used and if federal funds were provided.

According to Valerie Baron of the Natural Resources Defense Council, "These disposal methods are among the most dangerous for human health and severely threaten drinking water safety — yet there's zero transparency when it comes to where these mass burials or incinerations happen. With hurricane, flood and fire seasons exacerbating the dangers of these unfettered operations, it's even more urgent for the USDA to step up and take action to protect people, instead of Big Ag."

Those petitioning APHIS include the Natural Resources Defense Council, Animal League Defense Fund, Center for Biological Diversity, Earthjustice, Johns Hopkins Center for a Livable Future and Waterkeeper Alliance.

Ag border inspectors need funding
There has been a dramatic drop in the collection of user fees that fund Customs and Border Protection Agriculture Quarantine Inspection at U.S. ports of entry because of the drop in cargo imports and international travel due to the coronavirus pandemic.

This has resulted in an estimated shortfall of $630 million through fiscal year 2021. These funds are used to employee inspectors, technicians and canine units who are critical in keeping plant and animal pests out of the country.

In a letter to the House and Senate Appropriations Committee's leadership, over 150 agricultural and farm organizations ask that adequate funding be provided through fiscal year 2021. They say, "We depend on AQI to ensure that America's agriculture sector remains safe from foreign animal and plant pests and diseases. It is inconceivable that Congress would risk widespread damage to U.S. agriculture and the overall economy by not funding these inspections."

The National Pork Producers Council President Howard "A.V." Roth says, "CBP and USDA agriculture inspectors are our first line of defense to ensure African swine fever and other foreign animal diseases remain outside the United States. Lapsed vigilance of these inspections would have devastating consequences for U.S. pork producers and all of agriculture, the backbone of the American economy."

Those signing the letter include the American Farm Bureau Federation, American Feed Industry Association, American Sheep Industry Association, American Veterinary Medical Association, National Farm Credit Council, National Association of State Departments of Agriculture, National Cattlemen's Beef Association, National Chicken Council, National Milk Producers Federation, National Pork Producers Council and North American Meat Institute.

Have a great Fourth of July!

Source: P. Scott Shearer, who is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
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