Ratifying USMCA is critical to U.S. dairy’s future
Swift ratification of the trade agreement is critical to the industry’s future
Members of Congress will soon be asked to vote on the U.S.-Mexico-Canada Agreement (USMCA). Swift ratification of this trade agreement by the House of Representatives and the Senate is critical to the future of the U.S. dairy industry. Simply put, dairy wins if Congress supports this deal, so please join the International Dairy Foods Association (IDFA) and your industry colleagues in urging your senators and House members to ratify the USMCA.
Dairy exports are big business
Over roughly the past decade, the United States has transformed from a net importer of dairy products to one of the top three exporters of dairy in the world. Our country has a current dairy trade surplus of $2 billion, and we export dairy products to more than 140 countries across the globe. Free trade agreements such as USMCA that maintain and expand market access and lower trade barriers are crucial to continuing this trend of growing U.S. dairy exports.
Mexico and Canada are the top two export markets for U.S. dairy products, thanks in large part to the market access achieved in the North American Free Trade Agreement (NAFTA), the precursor to USMCA. Mexico imported more than $1.4 billion of U.S. dairy products and ingredients in 2018 compared to only $250 million in 1993 before NAFTA.
U.S. dairy exports to Mexico now account for one quarter of total dairy exports and support nearly 30,000 American jobs. USMCA will allow us to continue this growth by preserving our industry’s duty-free access to the Mexican market.
Turning northward, we exported more than $639 million of dairy products to Canada in 2018. This number should grow after USMCA is ratified because the agreement addresses a number of Canadian dairy pricing policies that have limited market access for U.S. dairy products. Most critically, the agreement would prevent Canada from dumping surplus skim milk powder on the world market at prices below the cost of production.
While these provisions must be enforced to be successful, we are pleased that USMCA contains strong transparency requirements that will hold Canada accountable for publishing timely data and notices on a public website. This information will promote our government’s ability to monitor and enforce the agreement.
Ratification would mean export growth
The benefits of USMCA for dairy and the broader U.S. food and agriculture industry were confirmed in April when the U.S. International Trade Commission (ITC) released an analysis of the agreement required by Congress. ITC estimated that USMCA would raise U.S. gross domestic product by $68.2 billion, generate a higher growth rate than other free trade agreements already in effect and create about 176,000 new American jobs.
Moreover, ITC said USMCA “would likely have a positive impact on all broad industry sectors within the U.S. economy” and that U.S. agricultural and food exports would increase by $2.2 billion. It estimated that exports of U.S. dairy products would increase by more than $277 million overall, with an additional $227.0 million of American dairy products going to Canada and $50.6 million more to Mexico.
The evidence clearly shows that USMCA will benefit the U.S. dairy industry, and the time has now come for Congress to ratify the agreement. IDFA’s legislative team is working closely with other representatives of the food and agricultural industry in Washington to urge senators and representatives to ratify the agreement.
You can play an important role in this effort by contacting your members of Congress to ask them to vote in favor of USMCA and support the U.S. dairy industry. For more information about how you can help, please visit https://tinyurl.com/yxuhnwap.
Working together, we can convince Congress to pass USMCA and allow the U.S. dairy industry to continue to grow.