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Senate Passes USMCA, Providing Reassurance and Certainty to Farmers

Just one day after the U.S. and China signed a Phase One trade deal, the Senate passed the U.S.-Mexico-Canada Trade Agreement (USMCA).

Wall Street Journal writer William Mauldin reported on Thursday that, “The U.S. Senate easily passed an overhaul of North America’s trade rules on Thursday, sending a major Trump administration priority to the president’s desk.

“The Senate voted 89 to 10 in support of the U.S.-Mexico-Canada Agreement, which replaces the 26-year-old North American Free Trade Agreement. The pact updates trading rules in the continent to address 21st-century technology, safeguard environmental and labor standards in Mexico and toughen requirements for auto-industry trade among the three countries.

“Notably, the vote reassures farmers, manufacturers and other businesses that tariff-free trade will continue in North America. President Trump repeatedly threatened to pull the U.S. out of Nafta if Canada, Mexico and lawmakers on Capitol Hill didn’t commit to an overhaul of the deal originally passed during the Clinton administration, and congressional passage helps the president fulfill a top campaign promise from 2016.”

The Journal article noted that, “The House last month approved legislation to implement USMCA by a 385 to 41 vote, with 193 Democrats and 192 Republicans backing the pact.”

Mr. Mauldin added that, “Mexican legislators last month approved the new version of USMCA, and Canadian Prime Minister Justin Trudeau acknowledged last month that Canada would likely be the last country to ratify the revised North American trade deal. Canada’s parliament, which had an election in October, isn’t scheduled to return until Jan. 27.”

Washington Post writers Erica Werner and Rachel Siegel reported on Thursday that, “[Pres.] Trump must still sign the revised North American Free Trade Agreement, something he suggested he would likely do next week.”

The Post article noted that, “Thursday’s vote came a day after Trump signed a partial economic deal with China, nearly two years into a protracted trade war with Beijing. As part of the deal, China committed to purchasing an additional $200 billion in American exports above previous levels.

With the USMCA vote, Trump has back-to-back victories on trade that may calm the waters after the president has provoked trade wars around the global and leveled tariffs on friends and foes.

Werner and Siegel explained that, “USMCA also gives American dairy farmers more access to the Canadian market, especially for ‘Class 7’ milk products like milk powder and milk proteins. The deal puts some restrictions on how much dairy Canada can export, which could help American dairy farmers edge into foreign markets.”

“Senate Passes USMCA, Giving Trump a Win Before Impeachment Trial,” by Erik Wasson. Bloomberg News (January 16, 2020).

And New York Times writer Emily Cochrane reminded readers on Thursday that, “While U.S.M.C.A. sailed through both the House and Senate, its approval was far from guaranteed a year ago, when Mr. Trump initially signed an agreement with Mexico and Canada.”

More broadly, Sabrina Rodriguez reported at Politico on Thursday that, “But above all, lawmakers, economists and trade experts have emphasized that the new deal offers some much-needed certainty for companies and workers in all three countries. Trump had long threatened to withdraw from the original NAFTA, a move that would have devastated the economies of all three countries.”

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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