USMCA Passes the Senate

Despite prognostications that any action on the USMCA would be delayed due to the upcoming presidential impeachment hearings in the Senate, the trade agreement has passed out of the upper chamber and is on its way to the President’s desk for his signature.

USMCA was voted out of the Senate Finance Committee by a 25-3 margin on Jan. 7 and proceeded to pass the full Senate with an 89-10 vote on Jan. 16. The new trade agreement between the United States, Canada and Mexico is set to replace the North American Free Trade Agreement, which had been in place for 25 years. Canada and Mexico are the two largest export markets for agriculture producers.

The new agreement was held up in the House of Representatives for over a year, before passing in mid-December, as Democrats sought to add provisions to further protect U.S. businesses and workers. Under the finalized USMCA, auto industry workers will see more protections, dairy producers will have increased access to Canadian markets and digital trade rules have been updated.

In December of last year, the Washington Post reported that farmers were expected to see a “mixed bag” in a list of winners and losers under the new agreement. Securing the Canadian and Mexican markets for agricultural producers was a win, but the publication noted that most of the gains under USMCA had been in place under the Trans Pacific Partnership, which President Trump pulled the U.S. out of in 2017. After over a year without an agreement in place, producers’ groups and Montana’s senators are pleased USMCA is on its way to implementation.

Montana Farm Bureau issued a press release the day of the vote saying the trade pact is expected to result in a $65 billion increase in gross domestic product. “Montana Farm Bureau has long been pushing for this agreement which will greatly benefit our state’s farmers and ranchers,” said MFBF president Hans McPherson. MFB said the agreement sets up “increased free, fair and equitable trade” between the U.S., Canada and Mexico.

“We are finally seeing movement on many trade fronts, and we look forward to seeing the benefits to America’s farmers and ranchers as well as to consumers. It’s a great day for agriculture,” McPherson said.

Senator Steve Daines, as a member of the Senate Finance Committee, voted twice to pass USMCA, once in the committee and once on the floor. “This trade deal is a big win for our farmers, ranchers, and small businesses across Montana and the country,” said the junior senator from Montana in a press release. “This deal provides certainty for Montana ag and protects critical access to our two biggest trading partners. I’m thankful for President Trump’s leadership in getting this done, and look forward to it being signed into law.”

Senator Jon Tester, an outspoken critic of President Trump’s trade war, welcomed the passage of the trade agreement. “Every Montanan working in production ag knows you need certainty and open markets to move your products,” he said via a press release. “The USMCA will help Montana producers regain the stability they’ve lost under this Administration and makes progress on critical issues like Canada’s discriminatory wheat grading practices. Enforcement is critical for this deal moving forward, but we can’t take our eyes off the ball on expanding access to markets around the world so Montana producers have more avenues to turn a profit.”

Senator Tester’s press release also included a quote from Montana Grain Growers Association president Vince Mattson praising the Senate for their vote in advancing USMCA. “This important trade agreement gives our farmers some stability with two of our largest trading partners in the world,” he said. “It will serve as a pathway to better markets, improved prices and act as a stepping stone for many more trade agreements in the future.

The Montana Stockgrowers Association applauded the Senate’s vote on USMCA, citing it as vital for U.S. beef producers. The producers group said the agreement, which modernized NAFTA, would be worth approximately $1.8 billion a year due to duty-free, unrestricted access to markets in Canada and Mexico.

MSGA president Fred Waker said, “The passage of the USMCA is great for Montana ranchers and will provide our producers the certainty they need to continue to raise some of the best beef in the world. We look forward to seeing this agreement implemented soon.” MSGA extended thanks to Senators Daines and Tester, as well as Congressman Greg Gianforte, for their bipartisan efforts in the bill’s passage.

Roger Johnson, president of the National Farmers Union, expressed support and hesitation regarding the trilateral trade agreement. NFU had not endorsed the agreement when it was introduced in 2018. However, NFU’s board voted to support the legislation after the House added its provisions, though the organization continues to work towards the inclusion of Country of Origin Labeling to protect and promote U.S. producers.

“Though USMCA is not a perfect replacement [for NAFTA], it does make some important changes to its predecessor,” Johnson said in a press release from the organization.

Montana Farmers Union president Walter Schweitzer echoed the national group, in a statement released by Senator Tester’s office. “I appreciate Senator Tester fighting to bring an end to these unnecessary trade tensions by passing USMCA,” he said. “While I am disappointed this deal fails to address important issues like country of origin labeling (COOL), it represents progress in raising labor and environmental standards. Let’s get this done so we we can move on to expanding markets for family farmers and ranchers.”

The passage of USMCA came one day after the administration signed Phase One of a new trade agreement with China, signaling progress in that front of the American trade war. The signing of two major trade agreements is expected to have a stabilizing effect on agriculture markets after a tumultuous year due to both weather and trade disruptions.