Some livestock groups oppose USMCA, but most commodities see benefits

The House passed USMCA overwhelmingly on Jan. 2, sending the trade agreement to the Senate. Most agricultural groups strongly support the new trade agreement, but a few groups remain opposed because it does not address country-of-origin meat labeling.

Most agricultural groups offered strong praise after the House overwhelmingly passed the U.S.-Mexico-Canada Agreement on Jan. 2, but some groups, especially ardent defenders of country-of-origin labeling, maintain Congress is abandoning their cause.

Commodity groups largely see benefits in the USMCA trade deal, which passed the House 385-41 in the last vote of the year before Congress adjourned for the year. The trade deal will now move to the Senate. Ratification is virtually assured, but could be delayed because of the impeachment trial against President Donald Trump.

USMCA is expected overall to eventually boost U.S. agricultural exports by about $2.2 billion, according to an International Trade Commission report earlier this year.

Some livestock groups, though, remain vigilant in their push to reestablish meat labels that were ruled as illegal by the World Trade Organization when Canada and Mexico challenged the U.S. country-of-origin labels (COOL) a decade ago. Canada and Mexico won a final ruling against COOL in 2015, and Congress immediately revoked the labeling rule. U.S. trade negotiators did not push to reinstate COOL as part of USMCA.

The Ranchers-Cattlemen’s Action Legal Fund, United Stockgrowers of America (R-CALF USA) said the group was “extremely disappointed but not at all surprised that it is business as usual in the House of Representatives. They continue to support the financial self-interests of multinational corporations while harming American consumers and independent cattle producers.”

On Twitter and in its statement, R-CALF stated the fight is not over yet, and the group would shift its efforts to the Senate while raising awareness of COOL.

The U.S. Cattlemen’s Association (USCA) sent a letter to Trump laying out its case for installing COOL as part of the trade agreement in the Senate. In the letter, Leo McDonnell, director emeritus for USCA, offered a detailed look at shifts in cattle markets throughout trade agreements that allowed more Canadian and Mexican cattle into the U.S.

“This administration promised to ‘Make America Great Again,’ but it is becoming evident this does not include U.S. ranchers,” McDonnell said. “The failure to include meaningful country-of-origin labeling (COOL) for beef in USMCA is disheartening at best.

McDonnell pointed out that domestic cattle markets were some of the best in history when COOL was in effect, “because consumers and retailers were given choices and U.S. ranchers were allowed to compete on a more level playing field by identifying their product for consumers. Certainly, without COOL how can one have a level playing field or even expect to compete?” McDonnell stated.

The National Cattlemen’s Beef Association (NCBA) called for swift passage of USMCA in the Senate. NCBA argued the trade agreement will maintain duty-free access to Canada and Mexico, and the group has been opposed to mandatory COOL.

“Today was a crucial win for all U.S. beef producers and a reassurance that U.S. beef will continue to have duty-free access to Canada and Mexico,” said Jennifer Houston, NCBA’s president. “A big thank-you goes to the Trump administration and every lawmaker who voted to approve USMCA. Of course, there is still more work left to do, so I urge the Senate to swiftly pass the USMCA and send it to the president’s desk.”

Dan Halstrom, president and CEO of the U.S. Meat Export Federation, applauded the House vote and said ratification would solidify trading relations with Canada and Mexico, which are major markets for pork, beef and lamb.

“This agreement will bolster the United States’ position as a reliable supplier to two leading markets that currently account for about one-third of all U.S. red meat exports,” Halstrom said.

Grain groups defend USMCA

Kevin Ross, president of the National Corn Growers Association (NCGA), spent Jan. 1 meeting with key House members to help shore up support for USMCA. “Corn farmers have been working toward this vote for nearly a year, sending emails, having meetings and making phone calls to their representatives in support of USMCA,” Ross said. “All of agriculture should be incredibly proud to see these efforts pay off with such a strong, bipartisan vote. We wouldn’t be at this stage in the ratification process without the hard work of individual farmers across the country. Ratifying USMCA has been NCGA’s top legislative priority because Mexico and Canada are the U.S. corn industry’s largest, most reliable markets.”

The U.S. Wheat Associates and National Association of Wheat Growers (NAWG) noted that USMCA not only retains tariff-free access to Mexico—the largest market for U.S. wheat—but the trade deal also opens up more potential exports to Canada by changing the way Canada grades U.S. wheat to give it reciprocal treatment with Canadian wheat.

“Agriculture desperately needed a win for economic recovery, and passing the USMCA was that win,” said Texas farmer Ben Scholz, president of the National Association of Wheat Growers. “NAWG applauds those members of Congress for their support and hard work to advance this critical trade deal one step closer to the finish line. We encourage the Senate to follow its lead and pass this deal early in the new year.”

The American Soybean Association (ASA) pointed out agriculture and business groups had rallied for months to ensure the House would pass USMCA. Mexico is the No. 2 market for soybeans, soymeal and soybean oil while Canada is the No. 4 market for soymeal and No. 7 market for soybean oil. Those exports to Mexico had quadrupled and had doubled going north to Canada under NAFTA.

“This is a win for soybean farmers, and a win for the administration and Congress,” said Bill Gordon, ASA’s president and a soybean farmer from Minnesota. “Their efforts to pass a free trade deal that can restore certainty and stability to an important export market for our farmers demonstrates that they can accomplish great things working in unison.”

Dairy support

Dairy exports to Canada alone are expected to grow about $300 million because of a change in allowing some exclusive access, as well as requiring Canada to drop its Class 6 and Class 7 dairy pricing schemes that had shut out some U.S. dairy imports. USMCA also sets new protocols with Mexico to ensure generic cheese terms, such as parmesan and feta, do not get classified as “geographical indicators” a market-protection effort used by Europe in trade deals.

“USMCA will bring tangible benefits to the U.S. dairy industry by upgrading trade rules, opening the Canadian market to U.S. dairy exports and preserving our valuable market access in Mexico,” said former Agriculture Secretary Tom Vilsack, now president and CEO of U.S. Dairy Export Council. — Chris Clayton, DTN ag policy editor

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