Opinion: This New Year, Pass USMCA
By Ryan Quarles
Kentucky Commissioner of Agriculture
FRANKFORT (Jan. 14, 2019) — On the heels of the successful passage of the federal farm bill, and with a new year upon us, there is a major opportunity to protect and expand market access for American agriculture in 2019: Congress must pass USMCA.
The last year has been dominated by headlines about international trade and the tough tri-lateral negotiations involving the United States, Canada, and Mexico. Now, a new trade framework has been proposed to replace NAFTA – USMCA. Under USMCA, the United States has rebalanced the deal to reflect American interests and the concerns of a 21st century economy. The effects of this agreement will benefit the United States for years to come.
USMCA provides several much-needed updates to NAFTA, a trade agreement that originated in 1993. The world of the early 1990s was very different from the world we live in now. Since 1993, the internet has revolutionized the way all countries do business, and industries like agriculture and biotechnology have been transformed in the modern economy. Just as you may not fit in the clothes you wore 25 years ago, the same could be said of trade agreements. Fortunately, USMCA addresses the new economy and includes a framework by which countries will have the opportunity to tweak the deal every six years.
There is particularly good news for the United States agricultural economy. Agriculture is dependent upon access to markets, and the USMCA increases market access for dairy, wheat, eggs, and poultry. Under the old trade agreement, 2017 United States agricultural exports to Canada were valued at $20.5 billion, which included 20 percent of Kentucky ag exports. With these increases in market access, we can reasonably expect an increase in Canada’s purchasing of American agricultural products, which means more dollars in the pockets of our hard-working farmers. That, in turn, will result in more shipments flowing through our critical riverports stationed along the Ohio River.
With USMCA complete, President Trump and his trade team can pursue new agreements that benefit American farmers and workers beyond the North American continent. And there’s been success there as well: In September, we clarified an agreement with South Korea (KORUS), and President Trump and Japanese Prime Minister Shinzo Abe announced plans to pursue a new trade deal for our two countries at the United Nations meeting. Japan currently buys more than $3 billion worth of American beef and pork, and with a new bilateral agreement, we can increase our sales. All of this is good news for our agricultural producers and workers who want consumers in other markets to buy our products.
Contrary to critics, a strategy seems to be emerging. A ratified USMCA would present a united front for our region to handle ongoing negotiations with China. While China has been a great importer of American ag products, for which our producers are grateful, long-term trade issues such as intellectual property rights need to be addressed. I am hopeful that the temporary ceasing of trade tensions will result in all parties coming to the table to discuss our differences so we can create a fair trading system that works for Americans.
While not perfect, USMCA contains several developments we can all get behind. We need to continue pushing to increase opportunities for people of all backgrounds so they can reach their own version of the American dream. Congress should move to quickly embrace this opportunity to provide certainty to our farmers, ranchers, and workers.
Ryan Quarles serves as Commissioner of Agriculture for the Commonwealth of Kentucky.