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Most agri-food groups welcome end to NAFTA drama

Many are still wading through the fine print of the new USMCA to understand its full implications

Most Canadian farm groups are relieved a new North American trade deal will preserve existing agriculture commitments.

The United States-Mexico-Canada Agreement (USMCA) still needs to be ratified by the three countries, but the negotiations have concluded and the text of the deal has been released.

One exception was the Canadian Federation of Agriculture (CFA) which was critical of the impact it will have on the dairy and poultry sectors. It is still counting the damage the deal will do to its producers and processors on top of what the European free trade deal and the Pacific accord will cost them.

Agriculture Minister Lawrence MacAulay has begun meeting with the groups on the government’s promise of compensation. As it’s expected to take months before the USMCA is ratified, there’s time to work out what assistance is required, a spokesman for the minister said.

A government background document touted the USMCA as bringing… “together an already highly integrated industry. Canada secured a number of beneficial outcomes for agriculture including new market access in the form of tariff-rate quotas for refined sugar and sugar-containing products.”

As well there will be a modernized Committee on Agriculture Trade to address issues and trade barriers and obligations for agricultural biotechnology that will increase innovation, transparency and predictability.

In return for eliminating Classes 6 and 7 milk, there will be “a mechanism to monitor exports of skim milk powder, milk protein concentrates, and infant formula.”

Details of these commitments have yet to be made public.

While welcoming the trade deal, the Canadian Agri-Food Trade Alliance (CAFTA), the Canadian Cattlemen’s Association, the Canadian Pork Council and the Canadian Produce Marketing Association along with the CFA said they would be studying it further before making additional comments.

Cam Dahl, president of Cereals Canada, said, “Achieving the agreement will ensure ongoing stability in agricultural trade within North America. Agriculture in all three countries has benefited from freer trade. Preserving these benefits was a key objective in these negotiations.”

He also welcomed the deal for modernizing provisions on biotechnology and new plant-breeding techniques and addressing issues of low-level presence. “These updates will help bring the agreement up to date with modern technology.”

Like other western groups, Cereals Canada welcomed the move to equal treatment under the Canadian grading system for Canadian and American farmers.

“Again, this is a modernization that addresses issues that did not exist when the original NAFTA was drafted,” he said. “The Canadian value chain supports these changes.”

CFA president Ron Bonnet said the trade deal was deeply disappointing even though it “did achieve beneficial results for some sectors within agriculture, such as increased U.S. market access for Canada’s sugar beet producers, initial indications suggest the livelihood of producers in Canada’s supply-managed sectors will be hurt by the concessions included within this new trade deal.”

CFA has called during the negotiations for regulatory modernization to help relieve logistical barriers to trade, he said.

“However, issues such as meat reinspection at the border, which creates delays, increases costs and thickens the border between the two countries’ highly integrated industries, were not addressed during these crucial talks,” he said.

However, CFA is relieved to see that Chapter 19 has been maintained, as this remains essential to all sectors that conduct international trade between the three USMCA countries, he said.

Jeff Nielsen, president of Grain Growers of Canada (GGC), said the USMCA “is a significant achievement that will support the integrated grain supply chains that exist and will encourage economic growth across rural Canada.”

The agreement “serves the interests of grain farmers from coast to coast and makes important incremental progress on key issues for grain farmers, including new text on biotechnology and low-level presence. In addition, it will remove legal barriers that prevent grain grown on both sides of the border from being treated equally, a long-standing request from GGC.”

Markus Haerle, GGC vice-president, said, “The United States and Mexico are major markets for most Canadian grains and oilseeds, including corn from Ontario, oats from Manitoba, and malt barley from Alberta. The certainty that the USMCA brings will support Canadian farmers who rely on access to the integrated North American market to succeed.”

Unimpeded access to world markets is increasingly important to Ontario grain producers, he said. “USMCA allows farmers and the agriculture industry to continue these strong relationships without any new issues or any new disruptions.”

Brian Innes, Canadian Agri-Food Trade Alliance president, said the USMCA is an important step forward for the farmers, ranchers, food manufacturers and agri-food exporters who rely on free and open trade and have felt the impact of continued uncertainty.

“With this agreement, we look forward to stability returning to our integrated North American agri-food supply chains,” he said. “The imposition of tariffs and uncertainty over the last several months has been challenging. In Canada, food and beverage is the largest manufacturing employer, more than the automotive and aerospace sectors combined. Agri-food manufacturing jobs and a prosperous agri-food sector go hand in hand.”

David Colwell, chairman of the Canadian Meat Council, said the USMCA is vital because “the North American meat industry is fully integrated, and having uninterrupted access across the three countries is critical. The ability of Canadian meat companies to compete on a global scale depends on their ability to also maintain and grow the North American market.”

The government’s recognition of the importance of this deal, that it is beyond any single sector, was an important factor in completing this agreement, he said.

The Cattlemen’s Association said the deal preserves and secures the duty-free access upon which the Canadian beef cattle sector has been built over the last 25 years.

“This is particularly important as we enter the time of year when the majority of beef calves in Canada are marketed,” it said. “Cattle buyers can feel confident about the long-term stability of the market and compete aggressively to acquire calves. In addition to preserving duty-free trade in live cattle and beef, producers are pleased that the existing rules of origin and dispute settlement provisions remain intact.”

The CCA was particularly interested in new chapters on Good Regulatory Practices and Competitiveness, which could “address regulatory matters affecting cattle and beef trade and to continuously improve the competitiveness of the North American beef sector. These new chapters provide an institutionalized pathway to continue these objectives.”

The Canadian Pork Council said the USMCA is reassuring for pork producers struggling with very low prices made worse by the uncertainty in global pork markets.

“An integrated North American market is not only economically advantageous, it serves to encourage producers to work together to address issues of common concern such as animal health,” said CPC chairman Rick Bergmann.

“We look forward to a stabilized pork market that will allow pork producers in Canada, the United States and Mexico to support one another in producing high-quality pork and contributing to growing the economy in their respective countries,” he said. The CPC also said it is pleased the new agreement will not include new tariffs and that it contains dispute mechanisms.

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