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PA Farm Bureau Encouraged by Revamped NAFTA Trade Agreement
Pennsylvania Ag Connection - 10/09/2018

Pennsylvania Farm Bureau (PFB) is cautiously optimistic that a new trade agreement dubbed the United States-Mexico-Canada Agreement (USMCA) will benefit farm families in Pennsylvania and across the nation by improving the North American Free Trade Agreement (NAFTA), which has been in place over the past 25 years.

"One of the major points we stressed during the negotiations between the U.S., Canada and Mexico, was for trade representatives to keep in place existing NAFTA provisions that benefit agriculture and to work to resolve several contentious issues, including dairy disputes with Canada," said PFB President Rick Ebert. "We are pleased that the new agreement provides new market access for dairy and poultry products, while maintaining the zero-tariff platform on all other agricultural products."

Farm Bureau notes that the agreement is important for American dairy farmers, who would be able to export products without tariffs until their dairy products equal 3.6% of Canada's domestic production. The USMCA also eliminates Canada's Class 7 dairy pricing program, which has been used to undercut U.S. sales of dried milk and high-protein milk products.

"The elimination of Class 7 pricing should help restore the market for U.S. dairy farmers selling ultrafiltered milk to Canadian cheese making companies. Dairy farmers hope increased trade will help reduce the oversupply of milk in the U.S. and provide a much-needed increase to their monthly milk checks," added Ebert.

President Trump, Mexican President Nieto and Canadian Prime Minister Trudeau still need to sign the USMCA and legislative bodies in the three countries will need to approve the agreement, before it can go into effect. If everything goes without a hitch, the new trade agreement should be in place in early to mid-2019. Meanwhile, U.S. tariffs on steel and aluminum from Canada and Mexico remain in effect, while retaliatory tariffs against American agricultural goods also remain intact.

PFB emphasized how critically important it is for Pennsylvania agriculture to have strong trade agreements with USMCA partners Canada and Mexico.

"Nearly 60 percent of all agriculture exports from Pennsylvania, which total more than $1.43 billion per year, are sold to Canada and Mexico under NAFTA, and those figures are expected to increase under the new trade deal," concluded Ebert.

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