New trade treaty seen as friendly to Virginia farmers

businessThere are plenty of positive improvements for Virginia farmers in the new North American Free Trade Agreement announced Oct. 2.

The 24-year-old pact between the U.S., Mexico and Canada, now called the United States-Mexico-Canada Trade Agreement, or USMCA, was due for an update, said Tony Banks, senior assistant director of agriculture, development and innovation for the Virginia Farm Bureau Federation.

“Canada has agreed to domestic policy changes that will allow U.S. dairy producers greater access to the Canadian market while also allowing Canadian dairy farmers reciprocal access to our markets,” Banks explained. “Virginia dairymen and grain and soy farmers should benefit as a result of the USMCA allowing greater market access for these U.S. commodities. The U.S. feed and pet food industry also is expected to gain further access to both Canada and Mexico.”

U.S. Secretary of Agriculture Sonny Perdue noted that the deal is “one of the president’s top goals” and “eliminates Canada’s unfair ‘Class 7’ milk pricing scheme, cracks open additional access to U.S. dairy into Canada, and imposes new disciplines on Canada’s supply management system.

“The agreement also preserves and expands critical access for U.S. poultry and egg producers and addresses Canada’s discriminatory wheat grading process to help U.S. wheat growers along the border become more competitive,” he added.

The previous agreement didn’t take into account scientific advances of the past quarter-century, Banks said. The new treaty also offers much more protection for U.S. intellectual property rights and digital technology.

“The USMCA builds upon NAFTA’s past successes for agricultural trade by updating ag biotechnology provisions, commodity grading standards and service language,” he noted. “It places more emphasis on science-based sanitary and phytosanitary procedures, and on technology, which should help ag commodities and products move faster and more freely between the three countries.”

Reaching an agreement between the three countries has been a top goal for the Trump administration since early this year. Canada is the second-largest foreign market for Virginia farm products, purchasing more than $296 million in 2016, according to Global Trade Information Services Inc.

All three countries still must ratify the agreement before it goes into effect; many provisions will not take effect until 2020.

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