Covid-19 response spurs Canada to pass US, Mexico trade deal

By Aerin Einstein-Curtis contact

- Last updated on GMT

© GettyImages/Elisa Lara
© GettyImages/Elisa Lara

Related tags: covid-19, trade agreement, Canada, Mexico, exports

Following passage by the Canadian Parliament, the US-Mexico-Canada trade deal is heading toward final implementation.

Canada was the last country involved in the agreement to see it pass through its legislature. Mexico made it official in June last year and the agreement passed through the US Congress in January. The agreement is intended to revise the North American Free Trade Agreement (NAFTA), which took effect in 1994.   

All three countries had to ratify the trade agreement before it could be officially implemented, said Gina Tumbarello, director of international policy and trade at the American Feed Industry Association in a previous interview​ on trade. When fully ratified the deal will replace NAFTA.

“Under NAFTA we were already enjoying zero tariffs,”​ she told us previously. “With the implementation of USMCA – the big wins are reinforcing those [elements] that allowed our industry to flourish and improving the conditions of competition and trade for our products.”

The news was welcomed by the US feed and grain industry.

“Our leaders and members are thrilled to see the completion of the US-Mexico-Canada Agreement’s approval process and look forward to it entering into force,” ​said Darren Armstrong, US Grains Council (USGC) chairman. The revised trade agreement brings multiple advantages to the industry.

“All told, we believe this agreement will solidify our most important and strategic trade relationships with our closest neighbors and best customers, and it will position our industry to continue to grow with our friends and partners in Mexico and Canada,”​ he said.

Sonny Perdue, US secretary of agriculture, said he was pleased with the approval and called it a “great victory for America’s agricultural industry.”

“USMCA locks in and expands access to our neighbors to the north and south,”​ he said. “We will continue to work with both Canada and Mexico in implementing this agreement.”

USMCA responses and highlights

The trade deal is expected to support US feed and agricultural interests with two of its most important trading partners, according to the US Department of Agriculture (USDA).

Canada and Mexico are the first and second-largest export markets for agricultural and food products from the US, the department said. In 2018, agricultural and food exports to both countries were more than $39.7bn.

The trade agreement continues to ensure zero tariffs on US feed grains, co-products and ethanol, reported the USGC. It addresses regulatory equivalence, transparency, provides for cooperative technical consultation and discusses the use of science and risk analysis.

The deal also includes the “highest enforceable sanitary and phytosanitary standards”​ provided in a trade agreement and establishes an “enforceable biotechnology chapter,”​ the council said. The agreement streamlines border processes and establishes a way to quickly address trade challenges.

The council has been working with the governments involved to address grain sector needs, added Armstrong.

In addition, the deal expands the access the dairy producers in the US have to markets in Canada and eliminates some milk pricing programs in that country, the USDA said. It also expands market access for poultry products in Canada and is set to change the wheat grading system in use there.

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