The implementation process of the United States-Mexico-Canada Agreement is ongoing and work on this agreement is never going to be finished, explains United States Trade Representative Katherine Tai while speaking at the Wilson Center’s “USMCA at One” virtual event to celebrate the one-year anniversary of the new NAFTA.
Tai joined June 30 with Mexico’s Secretary of Economy Tatiana Clouthier and Canada’s Minister of Small Business, Export Promotion and International Trade Mary Ng to share lessons learned and the outlook ahead after USMCA went into effect July 1, 2020.
“These agreements are about relationships and relationships are dynamic,” Tai notes. “The way we interact with each other, the mechanism for cooperation and building together and managing frictions is an ongoing process.”
Ng used the example of a hamburger as the interconnectedness of trade between the three trading partners where the beef starts in Alberta, is sent to the U.S. for processing, the bun is baked in Mexico from Canadian wheat, the lettuce comes the salad bowl of California and tomatoes from Mexico.
The Mexico trade minister explains the power of the new NAFTA offers businesses the ability to innovate and adapt through challenging times. This will be crucial as the countries all grow and strengthen the North American competitiveness and fostering enhancements in key sectors such as manufacturing and agriculture.
“There are going to be bumps along the road. But the bumps are stepping stones to success,” Ng adds.
U.S. Chamber Executive Vice President and Head of International Affairs Myron Brilliant, notes, “Looking ahead, it will be critical that the administration prioritizes enforcement, which on a number of business issues merits closer attention today.”
Already, the United States initiated a dispute settlement process regarding Canada’s implementation of its dairy provisions and closely watching Mexico’s handling of biotechnology approvals.
The Biotechnology Innovation Organization notes this meeting is critical in part because of Mexico’s rapid dismantling of regulatory institutions and international commitments with respect to ag biotech is concerning.
Mexico’s food and drug regulator has not issued a new biotech trait approval since May 2018—with nearly all products far exceeding Mexico’s six-month regulatory statute limit to make a determination on an approval. The Mexican government has not provided any explanation for the delay. In December, Mexico's president issued a decree stating the intention to phase out GMO corn for human consumption by 2024 and refrain from future biotech approvals.
“So, when we’re discussing ‘lessons learned’ from one year in USMCA, we must address the Mexican government’s unprovoked rejection of technology—technology that has been proven to enhance the sustainability of agriculture at a time when we need it most,” BIO says.
On a separate panel, House Ways and Means ranking member Kevin Brady, R-Texas, says that an effective dispute settlement to provide timely solutions will be important to see how it works. He raised the treatment of dairy and biotech in Mexico, while also recognizing our trading partners have issues they’ll want to raise as well.
“While there are challenges, I’m optimistic we can work through this in a way that provides rigorous enforcement and moves all three countries forward,” Brady says. “At the end of the day, the 21st century upgrade reduces friction of trade.”
“While today we are celebrating what we have accomplished with this new agreement, we must also acknowledge that there is more work to do. By continuing to work together, we can build a more competitive and resilient partnership that delivers shared prosperity across the region,” Tai says.
Foundation for future agreements
U.S. Chamber of Commerce’s Brilliant notes that the trade between the three countries supports more than 10 million jobs across all 50 states. In particular, the new deal has also brought real gains from USMCA’s updated rules on digital trade and non-tariff barriers.
Brilliant adds, “This anniversary is a good moment to celebrate the ways that USMCA has restored certainty in the North American trading relationship and guarantees a level playing field for American workers, farmers and companies. Indeed, today more than ever, the U.S. needs more market-opening, growth-supporting trade agreements to help U.S. businesses compete in global markets and support middle class jobs at home.”
Brady also says he hopes the passage of USMCA laid the foundation for future bipartisan trade legislation. USMCA achieved an unprecedented 89% support level in both the House and Senate. He says after the historic bipartisan support, he’s convinced Congress and the administration can work together to do more.
“I will continue to urge the Biden administration to lead on trade with bold new trade agreements throughout the world that will set the standard and advance trade,” Brady says.
Brady notes he served as the point person for the George W. Bush administration in negotiating the Central America Free Trade Agreement and Colombia FTA. He says there are opportunities in the Northern Hemisphere to do a reset or re-engagement with these regions similar to what was done with Canada and Mexico.
“I look forward to working with our trading partners to do that,” Brady says, adding he anticipates widespread support in Congress for that as well.
Chief ag negotiator wanted
Earlier in the week, members of Congress sent a bipartisan letter urging President Biden to nominate a chief agricultural negotiator at USTR. Since the role’s creation, the chief agricultural negotiator has been instrumental in prioritizing our producers in trade policy and eliminating numerous non-tariff barriers for American agriculture dominance and global food security.
“As our farmers and ranchers recover from the pandemic related supply and demand disruption, it is imperative they have a strong Chief Agricultural Negotiator to represent their interests across the globe,” says Rep. Jodey Arrington, R-Texas. “Nominating our lead negotiator for agriculture is critical to enforcing our current agreements and establishing new deals that level the playing field for our producers and eliminate trade barriers, which will expand America’s ability to provide the safest and best agricultural products to the world.”
Rep. Jimmy Panetta, D-Calif., adds in light of the increasing abuses of nontariff barriers, such as the sanitary and phytosanitary measures that affect fresh fruits and vegetables from the central coast of California, it’s vital that our agricultural producers have a dedicated advocate in the Office of the United States Trade Representative.
“Through this letter, we’re urging President Biden to nominate a qualified Chief Agricultural Negotiator so that we can secure greater international market access and enforce strong, science-based SPS provisions,” Panetta says. “By focusing on reducing trade barriers, a Chief Agricultural Negotiator can ensure that our farmers continue to feed the world and enhance our food security.”