COLUMN: U.S.-Mexico-Canada Agreement Promising for Washington Farmers
Two of the most important trading relationships in terms of purchasing U.S. manufacturing and agriculture exports are Canada and Mexico. The North American Free Trade Agreement (NAFTA) went into effect in 1994 to reduce trade barriers between our three countries. While NAFTA needed to be modernized, the agreement has been critical for our farmers and ranchers: According to the U.S. Department of Agriculture, since 1994, Canada and Mexico's purchases of American agriculture goods has quadrupled to $39 billion.
Trade agreements that level the playing field support jobs and foster economic growth in our state. In Washington state, 40 percent of jobs are tied to trade, and in 2016, Washington produced and exported $7 billion worth of food and agricultural products. For example, 90 percent of Washington wheat is exported annually, according to the Washington Grain Commission.
By last Sunday, Mexico had already agreed to an updated trade deal with the U.S., and September 30th was the deadline for Canada to agree to a revised trilateral agreement. At the literal eleventh-hour, Canada finally agreed to terms that are more favorable to American farmers and ranchers in the new the U.S.-Mexico-Canada Agreement (USMCA). Included in the USMCA are important changes such as Canada's elimination of its "Class 7" program that had allowed its low-priced dairy ingredients to undersell U.S. dairy products in Canada and in third country markets. Additionally, Canada also will provide equal treatment when assessing the quality of imported wheat. Canada will also allow new access for American dairy products, eggs, and poultry.
After months of uncertainty, the trade front has begun looking more confident for American farmers: In July, the Trump Administration announced a preliminary deal with the European Union towards the President's described goal of "zero tariffs, zero barriers, and zero subsidies on non-auto industrial goods." Last month, Japan announced that it would enter bilateral trade negotiations with the U.S. Japan is already the fourth-largest purchaser of American agriculture products, which totaled $12 billion in 2017, so improving our trade relationship would be very promising for farmers. Also last month, President Trump signed a revised U.S.-Korea Free Trade Agreement with our sixth-largest trading partner to lower barriers on automotive and agriculture goods.
The purpose of engaging in international trade is to expand markets for American goods, to boost jobs, and expand economic prosperity. The Trump Administration has been making important strides to improve trade relationships with our closest partners, while taking on competitors who engage in unfair practices.
Under requirements of Trade Promotion Authority, Congress will closely review the terms of the USMCA before voting on it, and I will be closely reading the agreement.
While we see positive motion on trade, Central Washington farmers still hope for a swift resolution with China. Billions of dollars in government support for farmers hit by retaliatory tariffs is a temporary solution. We need a fair agreement on trade with China.
The U.S.-Mexico-Canada Agreement is outstanding news for America's farmers, ranchers and manufacturers, and I applaud the work of President Trump, Agriculture Secretary Sonny Perdue, and U.S. Trade Representative Robert Lighthizer in successfully pushing to modernize the trilateral agreement with our closest trading partners.