Roughly 14 months after the leaders of United States, Mexico, and Canada reached an agreement on a new trade deal to replace the outdated North American Free Trade Agreement (NAFTA), and about one month after the House put their stamp of approval on it, the U.S. Senate voted 89–10 on Thursday to approve the aptly named U.S.–Mexico–Canada Agreement (USMCA), The New York Times reports.
The measure’s approval came just one day after President Donald Trump signed a highly anticipated “Phase One” agreement with China to end an ongoing trade war with the nation. According to Forbes, the combination sent stocks to new heights in the U.S.: “The Dow Jones Industrial Average rose 0.92%, the S&P 500 by 0.84% and the Nasdaq Composite by 1.06%.”
NAFTA: New and improved
There appears to be a little something for everyone to like in the USMCA, which replaces NAFTA, an agreement dating back to the early 1990s that Trump has called “perhaps the worst trade deal ever made,” according to NPR. The new agreement provides new standards on everything from auto manufacturing to protections for laborers.
The deal will also have a significant impact on agricultural production and international trade, and according to World-Grain.com’s Holly Demaree-Saddler, it has farmers, ranchers, and others in the agricultural sector cheering about their prospects for the future.
“The passage of USMCA is great news for America’s farmers and ranchers,” said U.S. Department of Agriculture Secretary Sonny Perdue, who noted that Canada and Mexico are the first and second-largest importers of U.S.-produced agricultural products.
Their purchases totaled nearly $40 billion in exports in 2018 and directly supported more than 325,000 American jobs, Perdue said.
“With congressional consideration now complete, our farmers and ranchers are eager to see the president sign this legislation and begin reaping the benefits of this critical agreement,” Perdue added in a statement. “I thank President Trump and Ambassador [Robert] Lighthizer for successfully delivering an improved and modern trade agreement and working so hard for the people of American agriculture to get this deal across the finish line.”
Headed to the president’s desk
According to Forbes, the USMCA has already been fully approved by Mexico; it awaits only President Trump’s final signature and approval by the Canadian Parliament before it takes effect. Reports suggest that should happen fairly soon, and U.S. agricultural producers are champing at the bit to begin reaping the benefits of greater access to North American markets, combined with tariff-free trade.
“I am excited for the opportunities that will come from the implementation of USMCA,” Constance Cullman, president and CEO of the American Feed Industry Association, told World-Grain.com.
She went on: “The USMCA not only builds on the success of NAFTA by facilitating greater market access, regulatory transparency and accountability among the three trading partners, but it also sends a message to our other trading partners that the United States is serious about enhancing trading relationships, supporting U.S. businesses and exports and setting a new standard for how trade agreements with the United States are expected to look.”
Passage of the deal was also praised by Bill Gordon, president of the American Soybean Association. “We appreciate Congress working with the administration, coming together for this bipartisan effort, and getting USMCA to the final step,” Gordon told World-Grain.com.
Indeed, the bipartisan approval of the USMCA by both the House and the Senate represents a huge economic victory for the U.S. — but it’s also a significant political victory for President Trump. This is yet another campaign promise Trump has successfully fulfilled, and just in time for his 2020 re-election effort.