Look­ing at Canada and Mex­ico, but see­ing China

Successful Farming - - FIRST CUT -

U.S. agri­cul­ture won mod­est gains in the new NAFTA, to be known as USMCA, while pre­serv­ing duty-free ac­cess for ex­ports to Canada and Mex­ico. Tak­ing a broader per­spec­tive, Agri­cul­ture Sec­re­tary Sonny Per­due sees the agree­ment as the har­bin­ger of a bet­ter deal for farm trade with China. “The domi­noes are fall­ing, and it is good news for U.S. farm­ers.”

Like other ad­min­is­tra­tion of­fi­cials, Per­due says the United StatesMex­ico-Canada Agree­ment, an­nounced last month and headed for a vote in Congress next year, is val­i­da­tion of Pres­i­dent Trump’s strat­egy of bull­doz­ing trade part­ners with tar­iffs and threats of other sanc­tions in or­der to win con­ces­sions. Trump threat­ened ad­di­tional tar­iffs on Chi­nese im­ports on the same day that he backed year-round sales of E15.

With re­tal­ia­tory tar­iffs against U.S. ag goods in place in China, Canada, Mex­ico, and the EU, Per­due says USDA is look­ing for al­ter­na­tive mar­kets for farm ex­ports. At a trade group meet­ing, he likened the ap­proach to play­ing “small ball” base­ball to score rather than re­ly­ing on the home run. Per­haps, he says, it was a mis­take in be­com­ing so de­pen­dent on China as a cus­tomer. Dur­ing a cel­e­bra­tory an­nounce­ment of USMCA, Pres­i­dent Trump said steel and alu­minum tar­iffs on Canada and Mex­ico were a sep­a­rate is­sue from the trade pact. Farm groups qui­etly urge re­moval of tar­iffs. The Pork Pro­duc­ers Coun­cil says hog farm­ers “demon­strated in­cred­i­ble per­se­ver­ance as the ad­min­is­tra­tion re­aligns U.S. global trade pol­icy.”

The ad­min­is­tra­tion says USMCA will en­able fairer ag trade but did not im­me­di­ately say how much it would be worth. Dairy of­fi­cials say Canada would re­main largely a pro­tected mar­ket. Canada agreed to grade U.S. wheat eq­ui­tably in­stead of au­to­mat­i­cally des­ig­nat­ing it as feed qual­ity. “Farm­ers should un­der­stand that noth­ing has changed yet,” say the Wheat Grow­ers and U.S. Wheat As­so­ciates. Rat­i­fi­ca­tion and im­ple­men­ta­tion of USMCA is likely to take months.

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