Weekly Column: Improving Access To Neighboring Markets
Guest column submitted by U.S. Senator Mike Crapo
The original North American Free Trade Agreement (NAFTA) needed to be re-negotiated. I voted against passage of NAFTA in 1993, because it was flawed. The agreement traded away sovereign rights of individual states and the federal government. Many goods and services originating in the United States received unfair treatment among trading partners. It also failed to provide sufficient market access and address problematic pricing structures and restrictive trade practices in the dairy sector. The enactment of the U.S.-Mexico-Canada Agreement (USMCA) is a welcome step in improving market opportunities for Idaho goods in our closest neighboring countries.
The work of Idaho agricultural producers is paramount to our state economy and feeding people both at home and around the world. The Idaho State Department of Agriculture reports Canada and Mexico are Idaho’s top two foreign markets for the sale of Idaho agriculture products. Canada is the destination for 26 percent of Idaho’s sale of agriculture products worldwide, while Mexico accounts for 20 percent. The USMCA will provide Idaho farmers, ranchers and small businesses with a trade agreement that opens new trading pathways while maintaining existing channels for top exports including potatoes, canola and beef cattle.
The new trilateral agreement updates the 1994 NAFTA by bringing the deal into the 21st Century and providing U.S. farmers with valuable new export opportunities. The agreement expands market access for farmers and addresses longstanding non-tariff barriers restricting U.S. producers’ ability to export wheat and wine to Canada. The USMCA also eliminates Canada’s Class 6 and 7 milk-ingredient price programs that hindered U.S. exports to third-country markets. The U.S. International Trade Commission (USITC) estimates these changes under the USMCA are expected to increase U.S. dairy exports to Canada by $227 million and Mexico by $50.6 million. Idaho is a leader in U.S. dairy production. By requiring the use of scientific standards, the trade pact will also prevent food safety and animal or plant health measures from being used as protectionist trade restrictions.
Beyond the many improvements in the agricultural sector, the USMCA is the first U.S. free trade agreement with a digital trade chapter, fostering U.S. growth in the digital economy for firms of all sectors and sizes. It will establish information-sharing tools to help the more than 120,000 American small-and-medium-sized businesses that export goods and services to Canada and Mexico take advantage of the USMCA. The USITC projects this agreement will raise U.S. real Gross Domestic Product (GDP) by more than $68 billion and create nearly 176,000 jobs.
Free and fair trade is vital for Idaho’s $4 billion export industry. Recognizing the importance of ongoing efforts to improve market access for Idaho goods and services, I serve as Co-Chair of the Canada-U.S. Interparliamentary Group, was appointed to serve on the President’s Export Council and was a delegate to the World Trade Organization negotiations in Seattle in 1999. As Chairman of the Senate Banking Committee and a senior member of the Senate Finance Committee, I continue to work to help direct trade improvements.
Fair treatment in the international marketplace remains a critical component of my focus in considering trade policies. I supported the USMCA when both the Senate Finance and Budget Committees considered it prior to the full Senate approving it in a bipartisan vote of 89-10 on January 16, 2020. Fellow Idaho Senator Jim Risch and I both voted in support of the trilateral pact. President Trump and U.S. Trade Representative Robert Lighthizer’s forceful negotiations of the USMCA will provide much-needed stability, certainty and market access for agricultural producers in Idaho who export products to our valued trading partners in Canada and Mexico.
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