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Why Minnesota agricultural interests are lauding the new USMCA trade deal

House Speaker Nancy Pelosi
REUTERS/Yuri Gripas
House Speaker Nancy Pelosi speaking during a news conference on the USMCA trade agreement on Tuesday. Rep. Dean Phillips is at left.

This week, House Speaker Nancy Pelosi and the White House reached a deal on passing the United States Mexico Canada Agreement. The House could vote on the agreement as soon as next week. (Senate Majority Leader Mitch McConnell said the Senate will not take up a vote on the deal until the new year.)

The far-reaching agreement touches on virtually all aspects of trade between the three countries, everything from intellectual property protections to the finer points of the Canadian dairy market.

The agreement is a big deal for Minnesota: In 2018, Minnesota had $7.2 billion in exports to Canada and Mexico combined, with two thirds of that going to Canada. And while many Minnesota economic sectors will be affected by the deal, Minnesota farmers have been particularly vocal in pushing for the agreement’s ratification.

Expanding agricultural markets

USMCA is meant to replace the The North American Free Trade Agreement, which was signed in 1994 by President Bill Clinton in to remove trade barriers and facilitate clearer rules of trade between the three North American countries.

USMCA establishes several new components when compared for NAFTA. For example, the deal establishes a comprehensive tri-national update to intellectual property law, with several components like extending copyright term of 70 years for an author.

REUTERS/Brian Snyder
Minnesota is the number one state for turkey production in the nation and two of the top five markets for distribution are Mexico and Canada.
But the boon for U.S. agriculture has particular relevance to the Minnesota economy: The agreement is expected to increase U.S. agricultural exports by $2 billion and improve market access for sectors like poultry and dairy.

Minnesota is the number one state for turkey production in the nation and two of the top five markets for distribution are Mexico and Canada. The key change established in the USMCA allows U.S. producers to export at least 3.5 percent of Canada’s turkey production from the previous year, significantly expanding the northern country’s intake of U.S. poultry.

Minnesota is also one of the top ten milk producers in the nation. With dairy, Canada will end a dairy pricing class system that has intentionally limited specific kinds of U.S. dairy exports into the country. The news is concerning to dairy farmers in Canada, who say they’re already strained, but positive for dairy farmers in Minnesota.

“This is a much-needed step as we continue to work on trade with countries all over the world,” Minnesota Farm Bureau President Kevin Paap told the Mankato Free Press. “I think this shows Congress can get those agreements done on a bipartisan basis.”

“As the largest turkey producing state in the nation, we need access to North American markets for our products,” Paul Kvistad, president of the Minnesota Turkey Growers Association, said in a statement. “The USMCA preserves the turkey industry’s trade relationship with Mexico – the industry’s largest export partner – and creates new opportunities for trade with Canada.”

Minnesota delegation supportive

Several of Minnesota’s representatives in Congress have lauded the final agreement on USMCA. Reps. Angie Craig and Dean Phillips stood behind Pelosi as she announced the finalized deal at a press conference.

“The administration forwarded what we considered an improvement over NAFTA. A good trade deal, but imperfect, as many of them are,” Phillips told The Morning News on WCCO. “And over the course of the year … we came to what was considered to be a significantly improved deal for the United States.”

Craig said that the final result “bolsters our economy, is good for family farmers, protects American workers, and improves access to affordable prescription drugs.”

dairy cow
REUTERS/Shannon Stapleton
With dairy, Canada will end a dairy pricing class system that has intentionally limited specific kinds of U.S. dairy exports into the country.
Rep. Collin Peterson, the Chair of the Agriculture Committee, said he pushed for this deal for months. “This announcement is great news for farmers, businesses and workers in Western Minnesota and nationwide. The threat of leaving NAFTA without a deal would have been devastating, and this deal provides needed certainty for our producers.”

Rep. Betty McCollum of St. Paul offered the strongest condemnation of the original version of the deal. “While the initial proposal by the Trump administration fell woefully short of needed provisions to protect workers and consumers, House Democrats negotiated meaningful and transformative safeguards to ensure that the USMCA improves upon both the original NAFTA and the flawed proposal put forth by the Trump administration,” she said.

Republicans in the delegation considered it a win as well. Rep. Pete Stauber said “agreement is great news for our nation,” calling it a win for “Minnesota’s farmers, manufacturers, businesses, and families.”

Rep. Jim Hagedorn said he was the first member of the Minnesota delegation to the support the USMCA. “I am thrilled that the White House, Republican leadership and Speaker Pelosi were able to reach an agreement to finally deliver this much-needed and well-deserved win to our workers, businesses, farmers and families,” he said.

“I hope the Senate will move quickly to ratify the deal and send it to President Trump’s desk.”

Comments (14)

  1. Submitted by William Hunter Duncan on 12/13/2019 - 07:30 pm.

    Any protections for water, the soil and pollinators?

    Any limits on consolidation?

  2. Submitted by Dennis Wagner on 12/13/2019 - 09:26 pm.

    Lets see if I have this right Trump pumped $28B of farmer welfare into their pockets this year, and the new deal is worth $2B, And that is considered a good deal? My math says we are still $26B. and counting out of the money! Must be that Trump better deal math.

  3. Submitted by Connor OKeefe on 12/14/2019 - 12:43 am.

    Farmers are being rewarded for their patience and support of Trump.

    Having wasted 3 years in schemes to undermine the President, the Democrats knew they had no choice but to make this deal, although they’re loath to give Trump the win.

    • Submitted by Joel Stegner on 12/14/2019 - 02:30 pm.

      You are forgetting about all the farmers who have worked hard to grow crops they couldn’t sell, committed suicide and have been forced out of business by Trump’s bully boy approach toward our neighbors. The reason it took three years is all the ill will he created. Democrats were very ready to support a bill that met everyone’s needs.

      • Submitted by Dennis Wagner on 12/14/2019 - 05:07 pm.

        Joel, sounds like some folks are saying the latest disaster is a gigantic win!
        https://www.fb.org/market-intel/farm-bankruptcies-rise-again
        Just a few facts:
        Chapter 12 filings up 24% over last year
        Income up to $88B highest since 2014’s $92B
        (Note) $44B is related to trade assistance, disaster relief, etc. (Read farm welfare)
        Farm debt is projected to be at an all time high $416 B.
        Suppose some folks take record high debt, record high farm welfare and skyrocketing bankruptcies as success! Sure don’t look at it from this perspective, Guess you need alternative facts.

    • Submitted by Pat Terry on 12/15/2019 - 04:34 pm.

      Trump created a crisis and then solved his own crisis, hurting a lot of people in the meantime.

  4. Submitted by joe smith on 12/15/2019 - 06:56 am.

    USMCA protects the USA from Chinese dumping steel disguised as Canadian steel. It also provides protections for products “made” in Canada/Mexico to have parts made in USA, Canada or Mexico. This is a good deal for more than just farmers. That is why it had broad support from everyone and Pelosi had to pass it to calm down her Democrats crying for her to do something for the American people.

    • Submitted by Dennis Wagner on 12/15/2019 - 01:04 pm.

      We will see if all that pain will be worth the gain, This reminds me of the bully in A Christmas Story that puts your arm behind your back and pushes it up until you say uncle, then when he lets go you are suppose to recognize him as such a magnanimous person because he let go!

      • Submitted by joe smith on 12/15/2019 - 10:45 pm.

        Dennis, that is not how the NAFTA program worked. They (China, Mexico and Canada) had America in an arm bar and we finally broke the hold with a new deal. Independent Ross Perot , a successful business man, famously said “ that sucking sound you are hearing is our manufacturing jobs leaving America” when NAFTA was passed. He was 100% correct. Democrats overwhelmingly voted for USMCA for a reason,. It is a good deal for America and American workers.

        • Submitted by Dennis Wagner on 12/16/2019 - 11:37 am.

          “had America in an arm bar”, Well Joe we will simply have to disagree. Unless you can provide evidence otherwise? No American company was forced (with an arm bar) to do business in/with China, Mexico,or Canada, As a retired International business manager for a small Minneapolis based business, we built a market selling high tech 100% manufactured in America goods into China. Trumps duties “destroyed” that market share that 10 years in the making. Last point, the new accord is not signed, and it will take time before we find out if it really works. It may be better, time will tell, I can agree to that, but did Trump have to start a trade war to get there? Sun Tzu would say Trump is a terrible general, Good Generals win wars before they are fought. i.e going to war is the last resort, it was Trump’s first.

          • Submitted by joe smith on 12/16/2019 - 02:47 pm.

            With NAFTA you had products using Chinese parts or in the case of steel, using Chinese steel being brought into the USA using NAFTA rules calling them Mexican or Canadian products. USMCA stops that. That was the arm bar they had on the USA, that loophole was plugged.

            How were you able to access the Chinese market? The Chinese normally need your intellectual property to give you access to their market. What high tech product was being sent to China from Minneapolis? I assume their will be a few casualties with any agreement but with a 420Billion trade deficit with China (mostly in high tech products and footwear/apparel) we needed a reset of our agreements both with China and North America.
            That is why the USMCA was supported by Democrats.

            • Submitted by Dennis Wagner on 12/16/2019 - 04:40 pm.

              Well Joe, what I read is those dumping claims are under investigation: In the mean time, US high added value fabricators using imported steel got hammered, (Guess for you, those are tough luck casualties of the Trade War, kind of like farmers). One source says: “Trump’s steel tariffs cost U.S. consumers $900000 for every job” , which interpreted from this perspective is Steel job welfare, or perhaps a better term Steel industry Socialism.
              How were we able to gain market? Maybe because we were good business folks, and worked closely with our offshore partners, maybe because we also developed advantages that offshore folks couldn’t duplicate or had a tough and expensive time, doing it. We also sued infringers, and won patent infringement suits, no surprise those infringers weren’t from China, try Taiwan, USA, and Malaysia. It is a complicated market place, and full of supply chains. There will be winners and losers, and that is exactly what in this opinion happened, Trump chose, to support the poor business performers at the expense of the folks that know how to battle it out in a real open and competitive market, “he put his finger on the scale”, some folks call it cheating! Coal is another perfect example: There never was a war on coal, it’s a technological revolution, been going on for > 40 years or longer. Got a publication in my library, Dated January 1978: US Department of Congress, National Technical Information Service, NCP/M4038-01 (Fundamentals of Solar Heating) Correspondence course. But then again,some folks will probably take that as proof positive evidence on how far back that deep state and conspiracy of a war against coal goes!

              • Submitted by joe smith on 12/17/2019 - 02:00 pm.

                Are you trying to claim that China, with preferred nation status, is a level playing field? Not sure you understand how that provision works? If you were able to access China’s high tech market without intellectual property transference, you were truly unique. No war on coal?? Please take a minute and look at the regulations and duplicate regulations intended to put coal plants, coal mines and coal miners out of business.

                • Submitted by Dennis Wagner on 12/18/2019 - 01:06 pm.

                  Joe, what I am claiming is that it is a very competitive environment out here, and “smart” folks/companies will find ways to make money.
                  Truly unique? Not sure what you are talking about, “Nearly 77% of the companies that took part in AmCham’s annual survey this summer said they made money in China in 2018. Almost half of the respondents also said they expected to invest more in the country this year, compared to just under a quarter that said they would scale back.”

                  Yes! no war on coal: The coal industry used the commons to dump their polluting product there-by reducing their cost of doing business. Evidently you believe it is OK for coal burning plants to pollute everyone’s air, they should not be regulated to burn their product cleaner? Does that also mean your neighbor can dump his garbage on your front lawn, how about companies leeching poisons into the aquifers? What do you think the key argument is on expanding mining up on the range? Its about, who pays when someone else’s stuff is polluted, and how do you collect if the mining company decides to go belly up or has moved on? Or worse yet the pollution is more or less so severe it can’t be cleaned up? Do people have rights to fresh air and water, land etc. or should corporations be free to use the commons as a place to dump their dangerous polluting by-products free of charge?

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