US, Mexico, Canada reach trade deal

By Erin Voegele | October 01, 2018

On Oct. 1, the U.S. government announced it has reached a new trade agreement with Mexico and Canada that will replace the North American Free Trade Agreement. The new agreement is named the U.S.-Mexico-Canada Agreement.

 Secretary of Agriculture Sonny Perdue issued a statement in support of the USMCA deal. “The great news of a new USMCA deal is important for our economy as a whole, including the agricultural sector, which counts Canada and Mexico in our top three trading partners,” Perdue said. “I have long said that I believe our country is located in the best neighborhood on Earth—North America—with valuable allies to our north and south. We have secured greater access to these vital markets and will maintain and improve the highly productive integrated agricultural relationship we have as nations.”

The National Corn Growers Association has spoken out to applaud the Office of the U.S. Trade Representative for reaching a new agreement. “Farmers across the country have been closely following NAFTA negotiations and reminding the administration of its promise to ‘do no harm’ to agriculture,” said Lynn Chrisp, president of the NCGA. “NAFTA has been an unequivocal success story for American agriculture, opening markets that since enactment have become vitally important to U.S. corn farmers, and providing certainty to farmers and the rural economy. We applaud USTR for reaching a new agreement and look forward to thoroughly evaluating it to determine if it continues to benefit American agriculture.”

According to the NCGA the U.S. exported $3.2 billion of corn and corn products to Mexico and Canada last year, supporting 25,000 rural jobs. The NCGA also cited the U.S. Chamber of Commerce as estimating that trade with Canada and Mexico supports 14 million U.S. jobs across many sectors.

The U.S. Grains Council also said it is pleased to see the U.S., Mexico and Canada reach a trade agreement. “No trade agreement has had more impact on our sector than NAFTA which prompted explosive growth in our export sales to both countries as well as the development of a fully-integrated grains and livestock supply chain within North America,” said Jim Stitzlein, chairman of the USGC. “Over the past two decades, this agreement has proven beneficial for the producers, agricultural sectors and economies of all three countries. We appreciate the dedicated, hard work of our negotiating team to achieve this outcome with our neighbors and customers and look forward to fully examining the new text as the process of approving the new agreement begins a new phase.”

USGC data shows the U.S. exported nearly 332.63 million gallons of ethanol to Canada during the 2016-’17 marketing year, up from 313 million gallons during the 2015-’16 marketing year. The U.S. also exported 27.6 million gallons of ethanol to Mexico during the 2016-’17 marketing year, down from 29.31 million gallons during the previous market year.

Both countries are also important buyers of distillers dried grains (DDGS). Mexico imported 2.06 metric tons DDGS during the 2016-’17 marketing year, up from 1.9 million metric tons during the 2015-’16 marketing year. Canada imported 669,267 tons of DDGS during the 2016-’17 marketing year, up from 548,719 metric tons the previous marketing year.