House passes US-Mexico-Canada Agreement
The House of Representatives today approved the bill to implement the U.S.-Mexico-Canada Agreement on trade, a top priority for almost all agricultural and food groups. The vote was 385 to 41.
In a sign of the bipartisan support for the agreement, Rep. Rosa De Lauro, D-Conn., sent her colleagues a letter explaining why she was supporting the agreement.
DeLauro, a trade skeptic who was appointed to the House Working Group on the NAFTA Renegotiation, said she had worked hard to achieve a number of policies within the agreement.
But she added, “It is vital, however, to remember that in many important ways this agreement falls short.”
“It lacks the robust climate standards that Democrats know our planet needs, the labor and environmental terms could be even stronger, and the agreement should exclude limits on consumer protections for food and product safety.
“It is important to understand that regardless of the president’s rhetoric, this agreement will not bring back U.S. manufacturing jobs.
“Over time, the labor standards and enhanced enforcement terms we forced into the new NAFTA may help raise wages in Mexico, and this may also reduce U.S. corporations’ incentives to outsource more U.S. jobs to Mexico to pay workers less.
“However, even if the new NAFTA reduces incentives for corporations to outsource jobs to Mexico, it cannot counteract the outsourcing incentives in President Trump’s tax bill. If a firm operating in the United States shuts production down and relocates production to Mexico, the firms federal tax rate is cut in half (a firm in the United States would pay a 21% corporate tax rate while offshore income is taxed at a 10.5% rate.)
“USMCA is not a model moving forward, but it establishes important principles we can build from.
“I do not believe the popular national view that wage stagnation in America today including trade agreements, is the inevitable result of globalization and technology. Special interests have shaped government policies that have held down wages and increased inequality. As Nobel winning economist Joe Stiglitz has written, ‘‘Inequality is not inevitable. It is a choice we make.’
“Major progress has been made on this agreement. I pledge to continue working with my colleagues to deal with the important issues relating to globalization and trade policy that we are facing today.”
NCBA Urges Senate to Swiftly Follow House’s Lead
WASHINGTON (December 19, 2019) – National Cattlemen’s Beef Association (NCBA) President Jennifer Houston issued the following statement regarding the U.S. House of Representatives’ approval of the U.S.-Mexico-Canada Agreement (USMCA) by a vote of 385-41:
“Today was a crucial win for all U.S. beef producers and a reassurance that U.S. beef will continue to have duty-free access to Canada and Mexico,” said Houston. “A big thank-you goes to the Trump Administration and every lawmaker who voted to approve USMCA. Of course, there is still more work left to do, so I urge the Senate to swiftly pass the USMCA and send it to the President’s desk.”
R-CALF USA doesn’t support USMCA because no COOL
Billings, Mont. – R-CALF USA, the nation’s largest producer-only cattle trade association that lobbies on behalf of America’s cattle farmers and ranchers issued the following statement on today’s passage of the United States Mexico Canada Agreement (USMCA) in the U.S. House of Representatives. The USMCA, same as its predecessor the North American Free Trade Agreement (NAFTA), does not require beef derived from Mexican or Canadian cattle to bear a label of origin at retail sale in our domestic marketplace.
“We are extremely disappointed but not at all surprised that it is business as usual in the House of Representatives. They continue to support the financial self-interests of multinational corporations while harming American consumers and independent cattle producers.
“But it isn’t over yet, we will now shift our focus on the Senate and meanwhile, we know that our efforts have significantly elevated the awareness that mandatory Country-of-Origin Labeling (COOL) for beef must be restored and we will not rest until it is.
“The longer Congress and the president stall to reinstate mandatory COOL for beef more and more of America’s largest segment of agriculture, the U.S. cattle industry along with economic opportunities for independent cattle producers, will be transferred to other countries; thus depriving rural America of its economic benefits.
The roll call vote was 385-41.
USCA Expresses Disappointment in Exclusion of COOL in USMCA
(Columbus, MT ) – Following the House of Representatives passage of the U.S.-Mexico-Canada Trade Agreement (USMCA) on Thursday, Leo McDonnell, Director Emeritus, United States Cattlemen’s Association (USCA), and long-time cattle industry leader has sent a letter to the President of the United States, agriculture committee leaders in both congressional chambers and the House Ways and Means Subcommittee on Trade expressing disappointment at the exclusion of a country of origin labeling provision in the U.S.-Mexico-Canada Trade Agreement (USMCA). McDonnell provided clarification for policy-makers as USMCA approaches approval in the U.S. Senate and by the president and corrected misinformation provided by proponents of the trade agreement that misrepresent the impact of the North American Free Trade Agreement (NAFTA) on the U.S. cattle industry.
“While some have said that NAFTA has had a positive impact on U.S. cattle producers, that is not correct,” wrote McDonnell. “NAFTA was an extension of the 1988 Canada-U.S. Free Trade Agreement (CUSFTA) to include Mexico and superseded the previous agreement with Canada. As one looks at the impact of North American free trade agreements you would need to go back to 1988 to accurately study prior trade flows with Canada and 1993 with Mexico as the two agreements went into force on January 1, 1988 and January 1, 1994 respectively.”
“Looking at the three-year average prior to CUSFTA (1985,1986, 1987) on just live cattle, Canada was exporting on average 280,000 cattle to the U.S. However, during the last three years (2016,2017, 2018), exports from Canada have averaged 1,200,000.”
“When studying cattle and beef/live cattle equivalents combines, the U.S. trade deficit with Canada has expanded by the equivalent of nearly 1.59 million head. Given this data, since NAFTA was implemented the U.S. trade deficit in cattle and beef/cattle equivalency with Mexico has expanded from 724,600 head to 1,220,700 head.”
“Industry analysts most often use a formula that a 1% change in supply impacts price 1.5% to 2%. Using that basis, just the increase in the trade deficit in cattle and beef with Canada and Mexico of over 4% has impacted prices 6% to 8% and this is an industry that operates on very narrow margins that have historically had problems maintaining a 3% to 4% return on investment. This is further compounded by what the USITC Chairmen in 1999 stated in her report, ‘packers can and do use imports to suppress domestic prices’ and the Republican Commissioners on the U.S. Senate Trade Deficit Commission Report in 2000, “Easy availability of imports can limit price increases either by expanding available supply or reducing the ability of businesses to raise prices in order to pass on increases in their costs.”
McDonnell described how currency devaluation or manipulation of the Mexican peso in the mid-1990’s increased the impact of artificially cheap imports into the U.S. market, something McDonnell said was hardly a win for U.S. ranchers struggling to recover from the agriculture collapse of the 1980s.
“U.S. cattle producers were promised in past trade agreements that cattle and beef would be included for Special Rules for Perishable and Cyclical Ag Products in future trade agreements; however, this does not seem to be the case with USMCA,” he wrote.
“This administration promised to “Make America Great Again,” but it is becoming evident this does not include U.S. ranchers. The failure to include meaningful Country of Origin Labeling (COOL) for beef in USMCA is disheartening at best. During the few years that COOL for beef was in effect, U.S. ranchers experienced one of the greatest cattle markets in history because consumers and retailers were given choices and U.S. ranchers were allowed to compete on a more level playing field by identifying their product for consumers. Certainly, without COOL how can one have a level playing field or even expect to compete,” McDonnell pointed out.
“Today, China requires the U.S. to comply with the following: 1) All beef must be derived from cattle that were either born raised and slaughtered in the U.S. or 2) are imported from Canada or Mexico and then raised and slaughtered in the U.S. or 3) imported from Canada or Mexico for direct slaughter in the U.S. Chinese consumers will be better informed about U.S. produced beef than American consumers.”
“I feel it is important that the record needs to be set straight about the impact of NAFTA and USMCA and to express our disappointment that USMCA fails to address the problems it will create for U.S. ranchers.”
–The Hagstrom Report, NCBA, R-CALF USA, United States Cattlemen’s Assocation
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