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USMCA enters into force today

The United States-Mexico-Canada Agreement (USMCA) officially replaces NAFTA and enters into force today after being signed into law by President Trump on January 29, 2020.

In a briefing White House press secretary Kayleigh McEnany said agricultural exports are expected to increase by $2.2 billion under the new agreement.

“USMCA creates more market access for farmers from across our nation to sell their wholesome and nutritious products to our closest neighbors. This is a better deal for America that will grow our economy and put more money in the pockets of American families,” said Secretary of Agriculture Sonny Perdue in a recent oped.

Canada and Mexico are the two largest export markets for U.S. food and agriculture products, totaling more than $39.7 billion food and agriculture exports in 2018.

“The implementation of this deal sends a strong signal to other important export markets such as the United Kingdom and the European Union that President Trump and Congress are serious about pursuing and enacting future agreements that create better economic opportunities for all parties involved. The United States is open for business, and our farmers are ready to export more of their wholesome and nutritious products to consumers around the world,” Perdue said.

Key Provisions of USMCA for farmers

Dairy

American dairy farmers will have expanded marketing opportunties in Canada for a wide variety of dairy products.

“USMCA eliminates Canada’s unfair Class 7 milk pricing scheme that was creatively developed to allow unfairly low-priced Canadian dairy prodcuts to undersell U.S. products in Canada and third-country markets,” wrote Perdue.

Biotechnology

The agreement was updated to specifically address agricultural biotechnology, including gene editing, to support innovation and reduce trade-distorting policies.

Geographical Indications

USMCA 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.

Sanitary/Phytosanitary Measures

The three countries agree to strengthen disciplines for science-based measures that protect human, animal, and plant heath while improving the flow of trade.

Poutry and Eggs

U.S. poultry farmers will have expanded access to Canada for chicken, turkey, and eggs. Perdue says this will directly benefit producers in Iowa, Georgia, Arkansas, and California.

Wheat

Canada agrees to terminate its discriminatory wheat grading system, enabling U.S. growers to be more competitive.

Wine and Spirits

All three countries agree to avoid technical barriers to trade through nondiscrimination and transparency regarding sale, distribution, labeling, and certification of wine and distilled spirits.

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