Food, Retail Industries Hail Signing of USMCA Legislation

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Food, Retail Industries Hail Signing of USMCA Legislation

By Bridget Goldschmidt - 01/29/2020
Food, Retail Industries Hail Signing of USMCA Legislation
With President Trump's signature, the U.S.-Mexico-Canada Agreement has become law, but Canada must still approve the treaty

President Donald Trump has signed the legislation to implement the United States-Mexico-Canada Agreement (USMCA), earning the hearty approval of the retail and food industries, which had long urged the treaty’s adoption.

“We believe this agreement will bring continued decades of economic prosperity that will benefit American consumers and the millions of U.S. workers whose jobs depend on the free flow of trade with our nation’s two closest trading partners,” said Matthew Shay, president and CEO of the Washington, D.C.-based National Retail Federation, who was present at the White House as the president signed the legislation into law. “Goods and materials have easily crossed North American borders for more than a quarter-century, and this modernized agreement will do the same for the new digital economy and set the stage for innovations yet to be seen. We hope to see the Canadian Parliament ratify the USMCA as soon as possible so the benefits of free trade in North America can continue uninterrupted.”

Shay noted provisions on digital trade, customs procedures and trade facilitation as major improvements in the updated agreement.

“The certainty this newly negotiated deal brings will allow retailers to invest, plan for the future, create jobs, and provide their customers with the widest possible selection of affordable and quality products,” noted Brian Dodge, president of the Washington-based Retail Industry Leaders Association. “This deal is particularly important to grocers who rely heavily on trade with Mexico to supply affordable produce to American families, and its enactment will ensure those trade relationships continue.”

On the food retail side, the reaction was equally positive.

“The [USMCA] improves North American Free Trade Agreement (NAFTA) by modernizing it for the 21st century and securing the gains of the last 25 years for future generations,” Andy Harig, VP of tax, trade, sustainability and policy development at Arlington, Va.-based FMI – The Food Industry Association. “This new North American trade agreement maintains and secures the existing supply chain, resulting in continued growth in U.S. food and beverage exports. The USMCA supports U.S. jobs and enables grocers to keep feeding families and enriching the lives of American consumers.”

“USMCA encourages free trade and ensures access to products produced and grown in Canada and Mexico that might not be otherwise available in the U.S.,” said Molly Pffaffenroth, director of government relations at the Arlington, Va.-based National Grocers Association (NGA), which represents the independent grocery sector. “NGA applauds Congress and President Trump for coming together on this vital agreement that allows independent retailers and wholesalers to serve their customers with high-quality products at competitive prices while spurring economic growth in their local communities.” 

Among suppliers to the grocery industry, the produce and dairy industries were quick to express their satisfaction at seeing the legislation signed into law.

Richard Owen, VP, global membership and engagement at the Newark, Del.-based Produce Marketing Association noted that the organizationhas been resolute in our support of the passage of USMCA and welcomes the update to NAFTA, which has significantly aided the effort to increase year-round availability of fresh fruits and vegetables, ultimately increasing consumption. In 2018, fruits and vegetables represented $4.2 billion U.S. in exports to Canada and Mexico, and vegetables, fruits and nuts totaled around $12 billion in imports from Mexico to the U.S. in the same year. As demand for fresh fruits, vegetables, and floral grows, the USMCA is necessary to our industries’ ability to maintain supply."

Added Owen: “One of the immediate benefits to the produce and floral industries will be greater predictability of trade. With predictability comes confidence, which in turn encourages investment in infrastructure and production to support the North American market. The agreement maintains zero tariffs for the trading of fruits and vegetables, modernizes labor provisions and intellectual property rights, and is consistent with PMA’s overarching goals for free and fair trade. “ 

“The new USMCA deal delivers a major win for U.S. dairy that levels the playing field with our largest trading partners," said Michael Dykes, president and CEO of the Washington-based International Dairy Foods Association. "It preserves hundreds of thousands of jobs in U.S. food and agriculture directly attributed to trade with Canada and Mexico. It removes several overly protective policies that had hampered U.S. agricultural exports. And it will raise U.S. GDP by $68.2 billion and pump an additional $2.2 billion, or 1.1%, into the U.S. economy through increases in agricultural and food exports.”

The legislation was passed by the House in December and by the Senate earlier this month.

USMCA isn’t quite ready to go into effect, however. Mexico has already ratified the agreement, but the Canadian Parliament has yet to approve it. According to Owen, “Some reports predict this could be days away, while others are claiming it could be months," while Dykes pointed out that "if Canada and the U.S. pass USMCA by spring, the earliest the deal could enter into force would be summer 2020."