PA Farm Bureau cautiously optimistic of new trade agreement

Photo courtesy of Ernie Mattiuz – The 2018 Pennsylvania Farm Bureau Board of Directors, Ernie Mattiuz, representing Armstrong, Clarion, Elk, and Jefferson counties is 4th from the left in the back row.
By: 
Brian Stockman
Staff Writer

The Pennsylvania Farm Bureau is cautiously optimistic that a new trade agreement dubbed the United States-Mexico-Canada Agreement will benefit farm families in Pennsylvania and across the nation by improving the North American Free Trade Agreement, which has been in place over the past 25 years, according to a recent press release.
"This will really help the struggling Dairy Farmers of Pennsylvania," said Ernie Mattiuz, PFB Board Member for Armstrong, Clarion, Elk, and Jefferson counties. "Dairy farms are closing every day in Pennsylvania and this may help stop the die-off."
As explained by the website, Macleans.ca, Provisions of the agreement cover a wide range, including agricultural produce, manufactured products, labor conditions, digital trade, among others. Some of the more prominent aspects of the agreement include giving US dairy farmers greater access to the Canadian market, guidelines to have a higher proportion of automobiles manufactured amongst the three nations rather than imported from elsewhere and a retaining of the dispute resolution system similar to what was included in NAFTA. The dairy provisions are similar, but slightly higher, to those Canada agreed to in the never-ratified Trans-Pacific Partnership, giving the U.S. tariff-free access to 3.6 percent, up from 3.25 percent under TPP, of the $15.2 billion Canadian dairy market. Canada agreed to eliminate Class 7 pricing provisions on certain dairy products, while Canada's domestic supply management system remains in place. Canada agreed to raise the duty-free limit on purchases from the U.S. to $150 from the previous $20 level, allowing Canadian consumers to have greater duty-free access to the U.S market.
MSN details in their recent article "What we know about the new USMCA trade deal," cars or trucks with at least 75 percent of their components made in the United States, Mexico, or Canada can be sold with zero tariffs. As this is an increase from the current requirement of 62.5 percent, the deal is intended to incentivize the production of cars in North America. Also, 30 percent of the work done on these cars must be done by workers who earn $16 per hour starting in 2020. The percentage increases to 40 percent by 2023, Additionally, there is a stipulation that the agreement itself must be reviewed by the three nations every six years, with a 16-year sunset clause. The agreement can be extended for additional 16-year terms during the 6-year reviews. The USMCA will extend the copyright length in Canada to life plus 70 years, and 75 years for sound recordings.
“One of the major points we stressed during the negotiations between the U.S., Canada, and Mexico, was for trade representatives to keep in place existing NAFTA provisions that benefit agriculture and to work to resolve several contentious issues, including dairy disputes with Canada,” said PFB President Rick Ebert in a press release. “We are pleased that the new agreement provides new market access for dairy and poultry products while maintaining the zero-tariff platform on all other agricultural products.”
The Farm Bureau notes that the agreement is important for American dairy farmers, who would be able to export products without tariffs until their dairy products equal to 3.6 percent of Canada’s domestic production. The USMCA also eliminates Canada’s Class 7 dairy pricing program, which has been used to undercut U.S. sales of dried milk and high-protein milk products.
“The elimination of Class 7 pricing should help restore the market for U.S. dairy farmers selling ultrafiltered milk to Canadian cheese-making companies. Dairy farmers hope increased trade will help reduce the oversupply of milk in the U.S. and provide a much-needed increase to their monthly milk checks,” added Ebert.
President Trump, Mexican President Nieto, and Canadian Prime Minister Trudeau still need to sign the USMCA and legislative bodies in the three countries will need to approve the agreement before it can go into effect. If everything goes without a hitch, the new trade agreement should be in place in early to mid-2019. Meanwhile, U.S. tariffs on steel and aluminum from Canada and Mexico remain in effect, while retaliatory tariffs against American agricultural goods also remain intact. PFB emphasized how critically important it is for Pennsylvania agriculture to have strong trade agreements with USMCA partners Canada and Mexico.
“Nearly 60 percent of all agriculture exports from Pennsylvania, which total more than $1.43 billion per year, are sold to Canada and Mexico under NAFTA, and those figures are expected to increase under the new trade deal,” concluded Ebert.
The Pennsylvania Farm Bureau is the state’s largest farm organization, representing farms of every size and commodity across Pennsylvania. For information about Joining the PFB please contact local representative Ernie Mattiuz, or go the website at www.pfb.com/membership/join-renew.

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