October 22, 2018
By Stefanie Croley
When the news broke that the United States and Canada came to a last-minute agreement on a trade deal to replace NAFTA, a collective sigh of relief could be heard from coast to coast to coast
At first glance, the United States-Mexico-Canada Agreement, or USMCA, seems like an overall win for Canada. The new agreement preserves the trade dispute settlement mechanism and safeguards Canadian auto plants.
Despite mixed reactions from Canada’s agriculture industry, USMCA seems to benefit a large majority of the group. Most significantly for export-oriented producers, the new deal will secure continued access for Canadian wheat and barley to the U.S. market – the largest export market for Canadian wheat and the second largest market for Canadian barley. Canada’s canola producers will also benefit, as open trade for canola will continue and margarine has been added to the list of canola processed products (which currently includes canola seed, oil and meal) that will remain tariff-free. And more modernizations are expected to be announced, including chapters on biotechnology, plant breeding techniques and adjustments to the wheat grading system.
But when American President Donald Trump began threatening the disbanding of NAFTA a year ago, he made it clear that concessions would have to be made, and other sectors of Canadian agriculture are less than thrilled with the negotiations. If the deal is approved, farmers in the United States will have greater access to Canada’s dairy industry, worth about 3.6 per cent of Canada’s current dairy market, according to the Dairy Farmers of Canada. The new agreement would also mean additional access to the Canadian chicken, turkey and egg farming sectors.
Allowing world leaders (who possess more power than they know what to do with) to wait until the eleventh hour to make a decision that will impact the economies and livelihoods of three countries seems like a recipe for disaster. Regardless, it’s impossible to please everyone – especially when negotiating a deal that will collectively affect 579 million North Americans in some way. But while USMCA overall appears to be a beneficial agreement for Canada and specifically Canadian grain producers, our close ties to the dairy, poultry and egg industries mean the win is bittersweet.
This isn’t the end, though. Although the negotiations are complete, all three countries must now vet and approve the agreement. Trump, Prime Minister Justin Trudeau and outgoing Mexican President Enrique Peña Nieto could technically sign the deal by the end of November (before Mexico’s new president takes office on Dec. 1). But legislatures of each member country must introduce legislation to ratify and implement the deal, pushing the timeline to the second half of 2019 thanks to elections in Canada and the United States. Only time will tell how this plays out.