USGC says new U.S.-Mexico-Canada agreement preserves market access


The U.S. Grain Counil (USGC) said the new United States-Mexico-Canada Agreement (USMCA) outlines terms of trade between the U.S. grains industry and its two largest customers that would preserve duty-free access to those markets and offer improvements to the procedures necessary for the free flow of trade.

USGC said the agreement kept what they described as “favorable trade terms that helped build a deeply integrated and growing supply value chain for U.S. grains and livestock.”

“The agreement adds positive measures related to rapid response for sanitary and phytosanitary (SPS) challenges, calls for increased transparency and science-based SPS measures in accordance international standards and specifically addresses agricultural biotechnology, including new breeding methods and gene editing,” USGC added.

“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 value chain within North America,” USGC Chairman Jim Stitzlein said in a statement.

Mexico and Canada are Nebraska’s two largest trading partners.

Nebraska’s top agricultural exports to Canada and Mexico are: beef: $246.6 million; soybeans and soybean products, $217.6 million; sugars and sweeteners, $124.2 million; ethanol, $88.5 million; and pork, $78.3 million.

USGC said Mexico has imported more than 14 million metric tons (551 million bushels) of U.S. corn thus far in the 2017-18 marketing year, September 2017 to July 2018, already exceeding last marketing year’s record-setting total and maintaining the country’s rank as top buyer of U.S. corn. Mexico is also the largest importer of U.S. dried distillers grains with solubles (DDGS) this marketing year at 1.95 million tons, up 3.2 percent year-over-year.

Canada is a major ethanol and DDGS buyer. The country imports close to 20 percent of its domestic fuel ethanol, nearly all of it from the United States. As the second largest buyer of U.S. ethanol overall, USGC said Canada has imported nearly 307 million gallons (equivalent to 109 million bushels of corn) this marketing year. Canadian imports of U.S. DDGS have steadily increased since the 2014-15 marketing year, with current marketing year imports of 605,000 tons.

“Over the past two decades, this agreement has proven beneficial for the producers, agricultural sectors and economies of all three countries,” Stitzlein said.

The International Trade Commission (ITC) will now review the agreement and issue a formal report on its economic impacts. Congress will also begin to examine the new text, which is likely to be signed in late November by the three countries. Then the countries’ respective legislative bodies must approve the pact before it becomes law and enters into force.

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