Virginia farmers have had a tough couple of years. We have weathered trade disruptions, tariffs, low commodity prices, and natural disasters. As we begin a new year, however, there is hope on the horizon in the form of the United States-Mexico-Canada Trade Agreement.
The USMCA will provide continuity in the growth of the North American market and will strengthen our trading relationships with Canada and Mexico, our No. 1 and No. 2 export markets, respectively. The agreement not only locks in market opportunities previously developed with our North American neighbors, but also builds on those trade relationships in several key areas. Estimates indicate the United States will gain more than $2 billion in additional farm exports and $65 billion in gross domestic product once the agreement is in place. Dairy, poultry, eggs and wheat are particular winners, and that will have considerable impact here in Virginia.
The food and other products grown by America’s farmers are among the world’s highest quality, most affordable and most competitive. Traditionally, about 25% of all U.S. farm products, by value, are exported to other nations. While that speaks volumes about the demand for U.S. farm products in the international marketplace, nowhere is our advantage clearer than in our two markets closest to home. The USMCA ensures those markets remain open, and it sets the stage for free and fair trade.
Demand is more important than ever because, on the supply side, America’s farmers are farming more efficiently across the board. For example, the U.S. Department of Agriculture just reported that, while farmers harvested fewer acres of soybeans this past year, they produced a record 4.54 billion bushels due to higher yields. Farmers are producing more food with fewer inputs—a win for their bottom line, the consumer and the environment.
To move that growing supply, USMCA builds demand through trade with our neighbors. It introduces new market access for dairy and poultry products and maintains the zero-tariff platform on all other ag products. For U.S. dairy farmers, USMCA eliminates aspects of Canada’s dairy program that had been used to undercut U.S. sales of dried milk products. Under the agreement, U.S. dairy products gain access to an additional 3.6% of Canada’s dairy market.
USMCA also includes new measures among the three nations that address cooperation, information sharing and other trade rules for agricultural biotechnology and gene editing. That should help prevent trade barriers based on how plants are bred, and could help set a standard when the issue comes up with other nations, such as China.
Also included are technical provisions to reduce other trade-distorting policies, increase transparency, and help ensure nondiscriminatory treatment of ag products among the three nations. For example, Canada has agreed to grade imports of U.S. wheat in a manner no less favorable than their own. And Mexico and the United States agreed that all grading standards for ag products will be nondiscriminatory. There are also provisions that enhance science-based standards for sanitary and phytosanitary measures, which in the past have been used as nontariff trade barriers.
Overall, this was a hard-fought win, and we commend the administration for this effort to solidify the trading relationships we have with our North American neighbors. Likewise, we commend U.S. trade negotiators—and their counterparts in Mexico and Canada—for striking this deal that gets it right by looking at the bigger picture.
In December, the House of Representatives passed the USMCA trade agreement on a bipartisan effort, evidenced by the overwhelming 385-41 vote. All but one member of Virginia’s House delegation voted in support of the agreement. Virginia’s U.S. senators, Mark Warner and Tim Kaine, have both announced their support for USMCA. Now it’s up to the Senate to seal the deal by ratifying USMCA in a timely manner and sending it to the president for his signature.
America’s farmers and ranchers depend on good relationships with our two closest trading partners, and they are depending on USMCA.