PET Food Processing - September 2019 - 30

REGULATORY

"In every respect, USMCA preserves or builds upon
current market access for US food, agricultural and
pet food products, and will facilitate more efficient
cross-border trade between all three countries."
Randy Gordon, National Grain and Feed Association

exports to Canada and Mexico have more than quadrupled under the existing North American Free Trade
Agreement (NAFTA), growing from $9 billion in 1993
to nearly $40 billion in 2018 and helping to support
more than 900,000 American jobs in food, agriculture
and related sectors of the US economy. The USMCA
builds on the success of NAFTA and is projected to deliver an additional $2.2 billion in US economic activity.
Importantly, the USMCA's improvements to address
non-tariff barriers, which are paramount among the current global challenges that distort and slow cross-border
trade flows, will serve as a model for future trade accords.
NGFA appreciates the efforts of US Trade
Representative Robert Lighthizer and his team working
with congressional Democrats to address what House
Speaker Nancy Pelosi, D-Calif., has called "surgical" enhancements to the accord's enforcement provisions applying to new Mexican labor standards, environmental
protections, and revisions to rules on biologic drugs. It is
encouraging that House Democrats are working to get to
a place where their caucus can vote "yes" on the accord.
But, as Lighthizer rightly said during a recent House
Ways and Means Committee hearing: "Getting this done
sooner rather than later is in everybody's interest...It
saves jobs, it helps the economy, it gets certainty in place,
so there's every reason to get this done." Lighthizer also
referenced a letter signed by 960 agricultural and food
groups, including the NGFA and more than 300 of its
member companies and affiliated associations, endorsing
immediate ratification of the USMCA.

Far reaching effects

NGFA has been vocal with lawmakers and the administration about the consequences of delaying the agreement. Trading partners like Japan need the assurance
that a trade agreement negotiated by the administration
ultimately will gain approval in Congress.
To avert a loss of market share in the Asia-Pacific,
the US is hard at work now negotiating a bilateral trade
agreement with Japan to provide market access and
tariff treatment for US agricultural products that are at

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PET FOOD PROCESSING | September 2019 | www.petfoodprocessing.net

least comparable to what Japan is providing to foreign
competitors under the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP) and
the EU-Japan Economic Partnership Agreement. US
competitors in the EU, Australia and Canada recently
gained preferential market access to the Japanese market
that exceeds what is currently allowed for the US under
WTO rules. For example, Japanese flour millers estimate
after CPTPP is fully implemented, they will pay an effective import tariff of $85 per metric ton for Australian
and Canadian wheat. Meanwhile, the effective import
tariff for US wheat will remain at $150 per metric ton.
Ratifying the USMCA also would serve to boost trade
negotiations with the United Kingdom. Currently, US agricultural and food exporters have limited access to that
market because of the European Union's restrictive, scientifically unjustified and protectionist tariff and non-tariff
trade barriers. A US-UK trade agreement is an opportunity
to work with our long-time British allies to develop a competitive and science-based trans-Atlantic market.
If NAFTA were to be repealed without enacting the
USMCA, Mexican tariffs on US corn could reach as
high as 37% and, for distillers, dried grain with solubles
(DDGS) could rise to 45%. The cost of tariffs in a formerly tariff-free environment for agricultural industries,
as well as the loss of scientifically-based agreements
addressing non-tariff barriers, is incalculable. The consequences are unfathomable.
President Trump, Canadian Prime Minister Justin
Trudeau and Mexico's then-President Enrique Peña
Nieto signed the deal in November 2018; Mexico ratified it in June. It's time for the US Congress to do likewise. That is why NGFA and its partners in the food and
agricultural sector are urging the House to ratify the
USMCA, and the Senate to follow suit shortly thereafter.
Ratifying the USMCA will provide the business certainty desperately needed by the US agriculture, feed
and feed ingredient, meat, and food and pet food sectors, and will demonstrate that the US remains committed to two-way trade that is so essential to economic
growth, job creation and global food security.
PFP
http://www.petfoodprocessing.net
PET Food Processing - September 2019

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