Tag Archives: USMCA

MEXICO CITY (AP) — Mexico’s Senate voted overwhelmingly Wednesday to ratify a new free trade agreement with the United States and Canada, making it the first of the three countries to gain legislative approval.

Mexico’s upper chamber voted 114 to four with three abstentions in favor of the U.S.-Mexico-Canada Agreement, or USMCA. It will replace the North American Free Trade Agreement, or NAFTA, which U.S. President Donald Trump had threatened to withdraw the United States from if Washington did not get a better deal.

Mexican President Andrés Manuel López Obrador said in a recorded message that the vote was “very good news.”

“It means foreign investment in Mexico, it means jobs in Mexico, it means guaranteeing trade of the merchandise that we produce in the United States,” he said.

The treaty does not need to be approved by Mexico’s lower house. It is still awaiting consideration by lawmakers in the United States and Canada, however.

“Congratulations to President Lopez Obrador — Mexico voted to ratify the USMCA today by a huge margin. Time for Congress to do the same here!” Trump tweeted.

U.S. Trade Representative Robert Lighthizer in a statement applauded Mexico’s ratification as “a crucial step forward.”

Ratification of the deal still faces some opposition in the Democrat-controlled U.S. House of Representatives.

The United States is by far Mexico’s biggest export market and its easy passage through the legislature had been expected. The approval came after Trump threatened to impose tariffs on all Mexican goods if López Obrador didn’t reduce the flow of U.S.-bound illegal immigration from Central America, a threat that was later suspended.

The USMCA was hammered out last year by delegations representing then-President Enrique Peña Nieto, of the Institutional Revolutionary Party, and then-President-elect López Obrador, of the left-leaning Morena, ensuring that both the outgoing and the incoming administrations were on board. López Obrador took office Dec. 1, a day after the agreement was signed.

Mexican lawmakers had already executed a series of labor reforms that the U.S. had demanded.

Mexico’s economy ministry said that with Senate approval “Mexico sends a clear message in favor of an open economy and of deepening its economic integration in the region.”

Mexico’s peso strengthened moderately against the dollar to 19.03 Wednesday, though the main factor was the U.S. Federal Reserve signaling that it was prepared to cut interest rates if needed to protect the U.S. economy, according to Gabriela Siller, economic analysis director at Banco BASE.

The United States buys about 80% of Mexican exports, some $358 billion worth last year. In the first quarter of 2019 the two countries did $203 billion in two-way trade, making Mexico the United States’ No. 1 commercial partner for the first time, ahead of Canada and China, according to the Mexican Economy Department.

Sen. Ricardo Monreal, leader of the governing party in the Senate, said the vote was “an important step to diminish the existing uncertainty for North American trade.”

Canadian Prime Minister Justin Trudeau heads to Washington, D.C. this week, as part of an effort to ratify the U.S.-Mexico-Canada Agreement. The trade deal has the least path of resistance in Mexico, where lawmakers are expected to ratify the agreement this month.

The trade deal also faces a quick route to passage in Canada, leaving passage in the U.S. the toughest battle to fully ratify the agreement. Canada expects final consideration of the agreement before September. Trudeau is scheduled to meet with House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell, along with a planned meeting Thursday with President Donald Trump, according to Reuters.

Trump, along with agriculture groups, have pushed for quick passage of the agreement. However, House Democrats want more time to review the agreement, pressing for potential changes. The agreement must first pass the U.S. House before the Senate can consider the agreement. Nearly 1,000 agriculture groups together last week urged Congress and the Trump administration to finish the agreement.

 In response to President Trump’s plan to impose five percent tariffs on all Mexican imports as of June 10, 2019, David Herring, president of the National Pork Producers Council and a pork producer from Lillington, North Carolina, issued the following statement:

“We appeal to President Trump to reconsider plans to open a new trade dispute with Mexico. American pork producers cannot afford retaliatory tariffs from its largest export market, tariffs which Mexico will surely implement. Over the last year, trade disputes with Mexico and China have cost hard-working U.S. pork producers and their families approximately $2.5 billion.

“Let’s move forward with ratification of the United States-Mexico-Canada trade agreement, preserving zero-tariff pork trade in North America for the long term; complete a trade agreement with Japan; and resolve the trade dispute with China, where U.S. pork has a historic opportunity to dramatically expand exports given the countries struggle with African swine fever.

“We hope those members of Congress who are working to restrict the administration’s trade relief programs take note. While these programs provide only partial relief to the damage trade retaliation has exacted on U.S. agriculture, they are desperately needed. We need the full participation of all organizations involved in the U.S. pork supply chain for these programs to deliver their intended benefits.”

For most of the last year, U.S. pork producers have lost $12 per hog due to trade retaliation by Mexico, which was lifted last week, according to Iowa State University Economist Dermot Hayes. Dr. Hayes projects that the U.S. pork producers will lose the entire Mexican market, one that represented 20 percent of total U.S. pork exports last year, if they face protracted retaliation. As of April 1, 2019, the value of U.S. pork exports to Mexico were down 28 percent from the same period last year.

Mexico plans for quick ratification of the U.S.-Mexico-Canada Agreement, setting the process in motion following action by Canada earlier this week. That leaves the U.S. behind both in the process as the Trump administration has yet to formally introduce the agreement to Congress.

However, the administration was reported to be sending a draft version to Congress Thursday. Vice President Mike Pence visited Canada Thursday to discuss moving the deal forward as Canada formally introduced the agreement to lawmakers earlier this week. Mexico’s President reported the documents were sent to Mexico’s Senate Thursday, and officials from Mexico were hopeful the U.S. would ratify the deal by July, according to the Associated Press. Mexico’s Senate is in recess, but officials say they will seek a special session to consider the agreement.

With the move by the Trump administration Thursday, the U.S. can send the formal agreement to Congress in 30 days. The House must vote on the agreement first, with no amendments, per Trade Promotion Authority. Democrats in the House have questioned provision in the agreement regarding labor and enforcement.

WASHINGTON, D.C. -Congressman Don Bacon (NE-02) today urged Congress to support the U.S.-Mexico-Canada Agreement (USMCA) trade agreement; a bipartisan treaty that benefits American farmers, ranchers, businesses, and workers by fixing longstanding imbalances and cutting regulations. This trade agreement will grant American farmers and businesses greater freedom to sell their goods and products throughout North America without the interference of government appropriations.

“Failure to bring this approval to the floor would put American farmers and workers at risk. As a nation of free trade, we must do what is best for America,” said Rep. Bacon. “To do this, non-tariff barriers and unfair subsidies must be eliminated and replaced. USMCA offers a fairer playing field for America. Every change in this agreement is better than NAFTA. I urge Congress to bring this to the House floor for approval.”

Rep. Bacon is a member of the House Agriculture Committee which has general jurisdiction over federal agriculture policy including agriculture, forestry, nutrition, water conservation, and other agriculture-related fields. The Committee can recommend funding appropriations for various governmental agencies, programs, and activities, as defined by House rules.

LUBBOCK, Texas — The announcement Friday, May 17, that Section 232 tariffs will be removed on steel and aluminum imports from Mexico and Canada is anticipated news and an important step toward the ratification of the U.S.-Mexico-Canada (USMCA) trade agreement. National Sorghum Producers Chairman Dan Atkisson, a sorghum farmer from Stockton, Kansas, released the following statement in response:

“We thank President Trump and the Administration for creating an avenue that will hopefully clear the way for USMCA to be ratified by Congress and enacted soon. The trilateral agreement with Mexico and Canada is important for our industry and provides agriculture producers more fair, open trade markets north and south of our country borders. Mexico continues to be a top buyer of U.S. grain sorghum, and we will continue to seek market expansion with our southern neighbors.

Now that Section 232 tariffs will be lifted on steel and aluminum imports, we call on Congress to pass the USMCA trade agreement swiftly.”