Canada’s grain sector has nothing but praise for the United States-Mexico-Canada Agreement (USMCA).
The trilateral deal reached Sept. 30 not only continues to give Canadian grain access to markets in the United States and Mexico, but it will also modernize areas covered under the former North American Free Trade Agreement (NAFTA), including chapters on biotechnology and new plant-breeding techniques and address issues of low-level presence, Cereals Canada said in a news release.
“These updates will help bring the agreement up to date with modern technology,” Cereals Canada said.
The USMCA agreement is significant for Canadian grain farmers, the Alberta wheat and barley associations said in a joint release.
“Together, the U.S. and Mexico account for roughly 15 per cent of total Canadian wheat exports,” the release said. “Total Canadian wheat exports to the U.S. are 2.3 million tonnes per year, Canada’s largest export market. Canadian wheat exports to Mexico are roughly 950,000 tonnes per year. Total Canadian barley exports to the U.S. are roughly 183,000 tonnes per year, making the U.S. Canada’s second-largest export market after China.”
Canadian wheat makes up 90 per cent of American wheat imports, Alberta Wheat Commission chair Kevin Bender said.
“The new free trade agreement with Mexico and the United States will allow us to build on our excellent relationship with these two key trading partners,” Saskatchewan Wheat Development Commission chair Laura Reiter said in a news release. “The agreement updates NAFTA with key amendments that require more co-operation, transparency and sharing of resources between the three countries.”
The Canola Council of Canada welcomed continued tariff-free access for canola seed, oil and meal into the U.S. and Mexico. However, the new agreement will allow further processed canola products to trade freely, the council said in a release.
“This modernized agreement removes the tariff on canola-based margarine going to the U.S.,” said council president Jim Everson, noting that was one of the opportunities the council encouraged negotiators to consider during NAFTA talks. “This update enables more value-added canola exports.”
The USMCA also includes new chapters on competitiveness and good regulatory practices, which will be helpful when resolving regulation-related issues that can be costly and a harmful trade barrier, the council said.
The Western Canadian Wheat Growers Association also praised the deal.
It backed American calls to allow American-grown wheats of registered Canadian varieties to be eligible for a Canadian Grain Commission grade. Currently those wheats receive the lowest grade of the class it’s being delivered into.
The Grain Growers of Canada says the historic agreement serves the interests of grain farmers from coast to coast.
“We would like to thank Minister Freeland, Prime Minister Trudeau, chief negotiator Steve Verheul and the rest of the negotiating team for their hard work in delivering a deal that gives farmers the certainty they need to continue to invest and grow,” Grain Growers of Canada president Jeff Nielsen said in a news release.
American grain groups also support the deal.
“The current North American Free Trade Agreement (NAFTA) is critically important for wheat farmers who depend on the enormous Mexican market that NAFTA built, but it did have room for improvements, particularly on grain trade with Canada,” the National Association of Wheat Growers (NAWG) and U.S. Wheat Associates (USW) said in a joint news release. “NAWG and USW called for a fix to the Canadian grain-grading system which automatically designates U.S. wheat as the lowest grade simply because it is foreign. This means U.S. farmers producing the highest-quality wheat arbitrarily get less value for their crop. Farmers should understand that nothing has changed yet, but we are pleased to see that USTR (United States Trade Representative) has made progress on this issue, with Canada agreeing to grade imported wheat with the same requirements as Canadian wheat.”