CoBank: Loose ends remain in USMCA

Negotiators for the United States and Canada continue work on finishing touches of the US-Mexico-Canada trade agreement following a hard Sept. 30 deadline that spurred down-to-the-wire talks on a rewrite of the North American Free Trade Agreement acceptable to both countries, CoBank’s Knowledge Exchange Division said in an analysis of the USMCA. The USMCA provides the US agriculture sector a level of certainty, improvements in market access for some ag-related products and momentum heading into trade talks with China, according to the report. However, the NAFTA rewrite leaves unanswered the question of when retaliatory tariffs – imposed when the US levied duties on aluminum and steel earlier this year – will end.“The US dairy and pork industries have been hardest hit by Mexican tariffs that were implemented in July as a response to US steel and aluminum tariffs imposed earlier in the year,” CoBank said in its report titled From NAFTA to USMCA. “Negotiations to eliminate the tariffs have begun, but there is no indication of how long they will remain in place.”Exporters of US poultry will receive 47,000 metric tons in tariff-free access to Canada's poultry market in the first year of USMCA. That amount will increase to 57,000 tons by year six and will grow by 1 percent annually for 10 years. US turkey also gained increased access of another 1,000 tons, up from 6,000 tons, sent to Canada in 2017, according to CoBank.However, the value of US meat exports to Mexico and Canada has dropped because of the retaliatory tariffs, pressuring margins especially for US pork producers.