US-Mexico-Canada Trade Agreement Is Crucial, Says NPC
The U.S. International Trade Commission has recently released a report on the likely economic impact of the pending U.S.-Mexico-Canada Agreement (USMCA). It found that the agreement will result in a modest overall increase in U.S. agricultural exports by 1.1% or USD2.2bn when fully implemented.
The incoming CEO and current V.P. of Public Policy for the National Potato Council (NPC) Kam Quarles says that “We shouldn’t be deterred by the relatively small anticipated gains in the USMCA vs. NAFTA. Right now, we do not receive the full benefits of NAFTA due to Mexico’s retaliatory tariffs.”
Mexico has retaliated against frozen fries due to U.S. steel and aluminum (Section 232) tariffs. This retaliation eliminated the 0% duty under NAFTA and replaced it with a 20% duty. It is estimated that the US potato industry will lose $80 million in exports annually if this situation persists with Canada and the European Union being the main beneficiaries.
“Passing the USMCA and removing Mexico’s retaliation must occur immediately to help us dig out of this hole. The cost of inaction is simply too great,” continued Quarles.
This report was a required element in the process of sending the USMCA to Capitol Hill for ratification. It notes that “most trade in agricultural products between the United States, Canada, and Mexico is already duty free under NAFTA and would continue to be duty free under USMCA.”