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Got Trade? Dairy Farmers Stand to Gain From the USMCA

Got Trade? Dairy Farmers Stand to Gain From the USMCA

Postby smix » Sat Dec 14, 2019 7:39 pm

Got Trade? Dairy Farmers Stand to Gain From the USMCA
Wall Street journal

URL: https://www.wsj.com/articles/got-trade- ... ?mod=e2two
Category: Business
Published: December 13, 2019

Description: The newly signed deal is sweet relief to farmers in rural districts like mine in North Carolina.
The trade agreement negotiated in 2018 by the U.S., Mexico and Canada languished for more than a year as congressional Democrats pressed the Trump administration to extract concessions from Mexico on labor regulations and pharmaceutical patents. The amended USMCA, successor to the North American Free Trade Agreement, was signed this week, putting an end to 14 months of political wrangling. But to those of us who live in farm country, the pact means a lot more than politics. To Sam Dobson, whose farm in Statesville, N.C., has been in his family for 150 years, the USMCA represents hope. He is a seventh-generation dairy farmer, and the USMCA boosts the chances that his son Chase will be the eighth. “In agriculture, your goal is to leave a legacy and not a liability, and the No. 1 goal for us on our farm is to leave our farm and our legacy just a little bit better than we found it when we got it,” says Mr. Dobson. Since Nafta came into force, U.S. agricultural exports to Canada and Mexico have quadrupled, from $9 billion in 1993 to $39 billion in 2017, according to the American Farm Bureau Federation. But dairy farmers were left behind as other agricultural exports boomed. U.S. milk prices are in the fourth year of a slump due to chronic oversupply. Canada has historically restricted how much U.S. milk it imports, putting U.S. dairy farmers at a disadvantage. Farmers in Iredell County, N.C., which I represent in Congress, produce more than 3 billion gallons of milk a year, according to the American Dairy Association of North Carolina. In the 1970s, there were more than 200 dairy farms in Iredell County. Now there are 22. This is a trend that goes far beyond North Carolina. The U.S. Department of Agriculture reports that 2,731 dairy farms across the U.S. closed last year due to a combination of low profit margins and a gradual decline in milk consumption. “Without these agreements,” Mr. Dobson says, “you’re going to see a disappearance of the industry.” I recently met with a handful of local dairy farmers in my district. Several of them have been involved in agriculture for generations. Like the Dobsons, they consider farming more than a livelihood. It’s about family, a passion for the land, and literally feeding millions of people. Even with a drastic decline in the number of dairy farms, Iredell has remained the top dairy-producing county in North Carolina. Farmers here will see significant benefits from passing the USMCA. Under this new deal, U.S. dairy farmers will be able to sell three times as much to Canadian markets as they could before. Canada has agreed essentially to get rid of tariffs and an unfair pricing system for American dairy exports. Under Nafta, U.S. access to the Canadian poultry market was linked to domestic production levels in Canada. This, too, will change under the USMCA. Canada will open its markets to imports of U.S. chicken and eggs and expand access for U.S. turkey, too. In 2018, poultry production in North Carolina was a $37 billion business supporting more than 150,000 jobs. I expect agriculture in my state to enjoy a boom in the coming year thanks to the USMCA. But North Carolina farmers won’t be the only ones to benefit. According to the Business Roundtable, trade with Canada and Mexico currently supports 12 million American jobs. Many sectors of the economy will find sweet relief in a modernized trade deal. The original Nafta negotiators couldn’t possibly have predicted the striking technological changes in the global economy over the past 25 years. This update is long overdue. While the U.S. economy is diverse, farming is still critical to many states and communities. In North Carolina, agriculture remains the driving force behind economic growth, as 80 of its 100 counties are considered rural. The USMCA provides farmers in these rural communities with more market opportunities and desperately needed certainty. American farmers face many challenges, from natural disasters to declining commodity prices. The least we can do for them is provide a stable marketplace and a level playing field. To most in Washington, the USMCA was a political prop in the larger drama of President Trump’s personality and governing style. But to America’s farm country, the past 14 months of partisan warfare have been excruciating and unnecessary. I am grateful that the deadlock has been broken and that North Carolina dairy farmers like the Dobsons have been given a fighting chance to leave their children a legacy rather than a liability.
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With USMCA Moving Forward, American Farmers Seek More Trade Deals

Postby smix » Sun Dec 15, 2019 4:48 am

With USMCA Moving Forward, American Farmers Seek More Trade Deals
Voice of America

URL: https://www.voanews.com/usa/usmca-movin ... rade-deals
Category: Business
Published: December 14, 2019

Description: CHICAGO, ILLINOIS - Since the Trump administration began reshaping trade policy in early 2018, U.S. farmers have endured fluctuating prices and uncertain destinations for what they grow and harvest amid increasing tariffs on grain exports. "We want trade, we don't want aid, but right now the bankers want paid," Steve Turner recently told hundreds of attendees at the Illinois Farm Bureau's annual meeting in Chicago. In Washington, meanwhile, House Speaker Nancy Pelosi announced Democrats had reached an agreement to support passage of the United States-Mexico-Canada Agreement, or USMCA, delivering a major trade victory to Republican President Donald Trump. Just a few days later, the White House announced a breakthrough in trade negotiations with China. But as diplomats and lawmakers work to turn trade negotiations into long-term agreements, Steve Turner is among many farmers across the country receiving payments from the U.S. government to compensate for income lost due to trade battles. The Department of Agriculture's Market Facilitation Program is distributing about $14.5 billion overall to farmers in 2019 on top of an estimated $12 billion in 2018. The MFP is intended to offset the immediate impact of tariffs on U.S. crop exports, helping farmers get through the resulting economic hardship while the Trump administration negotiates with key trading partners. "It made a big difference to our bottom line, absolutely, there's no question about it," Megan Dwyer told VOA while gazing out on her soybeans fields situated near Colona, Illinois. "If we're going to have tariffs, we ask that we be taken care of," says farmer Jeff Kirwan, who tends land in Mercer County, Illinois. The USDA reports that Illinois, where Dwyer and Kirwan both farm - is the state receiving the most MFP funds in the country. Iowa, Kansas, Nebraska, and Minnesota round out the list of top aid-receiving states. But many farmers say they prefer trade agreements over the MFP payments. "No one is looking for a handout," says Dwyer. Kirwan agrees, and says he supports what President Trump is trying to do in the hopes it makes the U.S. more competitive internationally on trade. "I think it's important when you talk about trade agreements that we want good, fair trade," which is also why Kirwan and Dwyer say they are relieved the USMCA is moving forward. The USMCA replaces the 1994 North American Free Trade Agreement, or NAFTA. A key part of the new agreement is to lower or end tariffs and boost markets for U.S. crops - most notably corn and soybeans - in countries bordering the United States. "One success leads to hopefully more successes," Kirwan said to VOA on the sidelines of the Illinois Farm Bureau meeting. Kirwan and Dwyer both see passage of the USMCA as a sign of things to come as the Trump administration continues to press for a comprehensive trade agreement with China. "It's just building some confidence with our other foreign markets," says Dwyer, "To show that the U.S. can come up with an agreement." On Friday, the White House announced progress in trade negotiations with China, agreeing to delay tariffs on Chinese-produced electronics and toys while reducing existing tariffs on other goods. In return, China is promising to buy more American agricultural output. Advocates for U.S. agricultural producers called the news a good first step. "America's farmers and ranchers are eager to get back to business globally," American Farm Bureau Federation President Zippy Duvall said in a statement Monday. "China went from the second-largest market for U.S. agricultural products to the fifth-largest since the trade war began. Reopening the door to trade with China and others is key to helping farmers and ranchers get back on their feet. Farmers would much rather farm for the marketplace and not have to rely on government trade aid." Similarly, the Illinois Farm Bureau called Friday's announcement "welcome news," adding that farmers in the state have "a profound desire to recapture lost export demand due to the prolonged trade war with China." The group expressed hope for "more good news yet to come." Illinois farmer Evan Hultine says he is "very excited" about the prospects of the purchase commitment China is making in the current phase of negotiations, but that the "residual stress" of the trade war has him taking a wait-and-see approach. "I don't think my nerves or trepidation will completely fade until China starts making physical purchases and commodities and money changes hands," he told VOA. Trade announcements take time to be implemented and even longer to benefit farmers economically. For all the trade headlines emerging in Washington, Turner says many farmers across America continue to struggle. "The economic damage to us on prices has still been done out here," he said. "Let's say that we have a [final] trade agreement [with China], and things really get moving - we know that the farm income situation has been affected and can't be turned around overnight," said Deputy Secretary of Agriculture Stephen Censky during a visit to the Illinois Farm Bureau's annual meeting. Censky said he hopes further MFP payments in 2020 won't be needed if negotiators can reach a full and comprehensive trade agreement with China, which is one of the largest buyers of U.S. soybeans. "All of us want to have trade and not aid," says Censky. "None of us wants to have this level of government payments going to farmers. We want the markets." Farmers echo the sentiment but also want to know the U.S. government will continue to support them if further trade progress doesn't materialize and their list of worries continues to extend beyond omnipresent factors, like the weather.
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