While some political obstacles still need to be worked through, it appears that a vote on the U.S.-Mexico-Canada Agreement (USMCA) may finally be on the horizon. The agricultural industry has anxiously been waiting for USMCA ratification after the terms were agreed to between the countries involved more than a year ago.
“That’s what the tea leaves reading seem to suggest right now. Reports are out that Speaker Pelosi says that a vote is ‘imminent’ and that’s welcome news for everybody,” said Veronica Nigh, Economist for American Farm Bureau Federation (AFBF). “We all know how important NAFTA has been. Almost a third of our exports are to Canada and Mexico and anything to keep from jeopardizing those exports will be important.”
The renegotiation of the North American Free Trade Agreement known as NAFTA has been a cause for concern for several industries outside of agriculture, due to the significance of the markets involved. The unease created by the lengthy negotiation and ratification process for USMCA has been compounded by deteriorating trade relations with China. Significant time and investment have been made in expanding and developing trade in other countries. “We’ve been trying to make up exports elsewhere, but certainly new trade agreements would help and USMCA getting done and finished would certainly pave the way for that,” said Nigh.
There is hope that USMCA ratification will be a significant step towards solidifying other ongoing trade negotiations. In recent weeks a substantial trade breakthrough was made between the U.S. and Japan which could bring even more momentum to continuing trade talks in other markets.
“A couple of bowling pins knocked down in three really important markets would certainly be helpful,” Nigh noted. “Right now, our six top markets make up about 80 percent of U.S. ag exports and we’ve got question marks hanging over two, or three, or four of them. So, eliminating a few of those would certainly help.”