Agriculture Interests Praise Customs Improvements in USMCA
When an agriculture shipment is held up at the border, the U.S.-Mexico-Canada Agreement says a country must let the shipper know what the problem is within five calendar days. That's better than the deadline under the Trans-Pacific Partnership. Randy Gordon, CEO of the North American Export Grain Association, pointed to that as an example of the reduction in non-tariff barriers that the new pact would bring that would help agriculture interests. He also praised the ways the pact addresses sanitary and phytosanitary standards, and said the countries should be able to resolve conflicts more quickly as a result.
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Jim Stitzlein, chairman of the U.S. Grains Council, noted that since there are already zero tariffs on agricultural trade, the U.S. International Trade Commission has to examine the benefits of non-tariff barrier reductions. He said he expects the modernization will allow products to cross borders more quickly. However, he said he wishes the agreement had addressed the presence of dust or soil in shipments, which has led to holdups and fumigations at the Mexican border.
Gordon, Stitzlein and other agriculture representatives testified Nov. 15 on the first of two days of hearings at the ITC on the U.S.-Mexico-Canada Agreement, the reboot of NAFTA. Florida and Georgia fruit and vegetable growers said in their testimony that they will go out of business because the new NAFTA doesn't have a seasonality antidumping provision.
International Dairy Foods Association CEO Michael Dykes focused more on the market access improvements won by U.S. negotiators in the deal. He complained that the Class 6 program virtually stopped ultra-filtered milk exports to Canada, "effectively destroying a $150 million market for U.S. dairy processors." The USMCA garnered a Canadian promise to end that program, as well as one that increased nonfat milk production in Canada. "Canada agreed to use its oversupply of skim milk domestically as animal feed and price its skim milk solids used to produce nonfat dry milk, milk protein concentrates, and infant formula no lower than a level based on the United States price for nonfat dry milk," he said.
But he questioned whether the higher quotas in Canada's tariff rate quota system will lead to higher exports. "There's a long history of Canada trying to circumvent what has been agreed to," he said. "There's precedent for Canada not to fill quotas ... for these reasons, we believe that actual market access for the U.S. dairy industry to the Canadian market could be much lower than what was negotiated."