Food and retail industry leaders are applauding the passage of the United States-Mexico-Canada Agreement, saying the new trade deal will create new export opportunities for some food and agricultural items and lower costs.
The deal, known as USMCA, was passed by the U.S. Senate by a vote of 89-10 nearly two years after being introduced in 2018. It will now move to President Donald Trump to sign into law. Mexico has already approved the agreement and the Canadian legislature is expected to approve in the next several months. The USMCA will replace the North American Free Trade Agreement (NAFTA) that the three countries have operated under for 26 years.
The USMCA represents an effort to grow exports to the two largest markets for food and agricultural products in the U.S., which totaled more than $39.7 billion in 2018. These exports support more than 325,000 American jobs, industry trade groups said.
“Today’s passage of the USMCA ensures the close economic ties between the U.S., Canada and Mexico and will continue to benefit American consumers and food retailers by lowering costs, broadening supply networks, improving eating quality, increasing assurance about food safety and reducing product losses,” said Andy Harig, VP of tax, trade, sustainability and policy development for the Food Marketing Institute, Washington, D.C.
“The produce industry is one of the cornerstones of the original NAFTA agreement, and its continued success is vital for the economic well-being of all three countries. The USMCA includes important reforms that will ensure that the success of NAFTA will continue well into the 21st century,” said Tom Stenzel, president and CEO of the United Fresh Produce Association, Washington, D.C.
Key provisions within the USMCA include:
Increasing Dairy Market Access
America’s dairy farmers will have expanded market opportunities in Canada for a wide variety of dairy products, trade groups said. Canada agreed to eliminate Class 6 and 7 milk-pricing programs that allowed farmers to undersell U.S. producers.
For the first time, the agreement specifically addresses agricultural biotechnology—including new technologies such as gene editing—to support innovation and reduce trade-distorting policies.
The agreement institutes a more rigorous process for establishing geographical indicators and lays out additional factors to be considered in determining whether a term is a common name.
The three countries agree to strengthen disciplines for science-based measures that protect human, animal and plant health while improving the flow of trade.
Poultry and Eggs
U.S. poultry producers will have expanded access to Canada for chicken, turkey and eggs.
Canada agrees to terminate its wheat grading system, enabling U.S. growers to be more competitive.
Wine and Spirits
The three countries agree to avoid technical barriers to trade through nondiscrimination and transparency regarding sale, distribution, labeling and certification of wine and distilled spirits.