Infographic: Top U.S. Food and Agriculture Exports to Mexico and Canada = $40 Billion in 2018

Mark O'Keefe

Jobs and economic growth are on the line—and not just for dairy—when Congress considers the U.S.-Mexico-Canada Agreement (USMCA).

The ability to export U.S. dairy products and ingredients to Mexico and Canada is vitally important for the economic future of American dairy farmers, processors and the millions of jobs the U.S. dairy industry supports.

Dairy is hardly alone. The infographic below shows how important North American export markets are to other U.S. food and agriculture industries.

 

 

Food/Ag Exports to Mexico and Canada Totaled $40 billion

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Chart source: The U.S. Food and Agriculture Dialogue for Trade 

The data comes from The U.S. Food and Agriculture Dialogue for Trade, an organization of more than 200 U.S. food and agriculture companies and associations, including the U.S. Dairy Export Council. 

FACT SHEET: Measuring the Economic Impact of USMCA

To quantify the impact of trade with Canada and Mexico, the coalition aggregated its members’ data and found:

  • Total exports to Mexico and Canada by the top 10 agricultural industries was $40 billion in 2018.
  • When the North American Free Trade Agreement (NAFTA) was ratified in 1993, exports within North America totaled $8 billion from those same industries.
  • Under NAFTA, tariff-free food and agricultural trade increased 400% over 25 years.
  • Exports to Mexico and Canada were 28% of all agricultural exports during that same time period.

The numbers underscore the importance of the U.S.-Mexico-Canada Agreement. USMCA was signed by presidents of the three countries but now needs ratification by all three legislative bodies in order to become law.

If that happens, the new USMCA would replace NAFTA.

“We shipped $1.4 billion in dairy products to Mexico last year, which accounts for more than one-fourth of U.S. dairy exports,” said USDEC President and CEO Tom Vilsack in a joint news release with the National Milk Producers Federation.

“Without a trade treaty with Mexico in place, the dairy industry would be hard pressed to maintain and expand these sales, as our competitors in Europe are expected to implement a lucrative new trade arrangement with Mexico by next year. Moreover, without USMCA we lose out on the new rules this deal puts in place for key reforms to Canada’s dairy system.”

 

 

The importance of Canada and Mexico to U.S. Food and Agriculture

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Chart source: The U.S. Food and Agriculture Dialogue for Trade 

On April 18, the U.S. International Trade Commission (ITC) released its economic analysis of USMCA, prompting other presidents heading agriculture-based associations to speak out, including:

  • National Milk Producers Federation President and CEO Jim Mulhern:“USDA recently reported that our country lost an average of seven dairy farms a day in 2018 due to the poor economic conditions in rural America. That’s a startling number, and reversing this alarming trend is what we should be discussing. USMCA helps put us on a path to doing that by safeguarding our largest export market and instituting valuable new improvements to dairy trade in North America.”
  • American Soybean Association President Davie Stephens: “We know that the modernizations included in USMCA will make trade with our North American neighbors even smoother.”
  • National Association of Wheat Growers President Ben Scholz: “A vote for USMCA means more jobs for Americans, stronger export markets for farmers to sell their crop, and billions of dollars added to the economy.”

The U.S. Food and Agriculture Dialogue for Trade has summarized  the recent International Trade Commission report and what USMCA does for U.S. food and agriculture producers.

Those summaries are below.

Summary: Facts about the International Trade Commission (ITC) Report

  • This report is required under the Bipartisan Trade Priorities and Accountability Act of 2015, known as Trade Promotion Authority or TPA.
  • Measuring the economic impact of USMCA is unlike anything the ITC has been asked to do regarding other trade agreements because typical ITC reports examine new trade agreements, not changes to existing trade agreements.
  • The USMCA is a successor to the 25-year-old North American Free Trade Agreement (NAFTA).
  • NAFTA eliminated all Mexican tariffs on U.S. exports.
  • NAFTA and its predecessor, the U.S. Canada Free Trade Agreement, eliminated Canadian tariffs on approximately 99 percent of all U.S. exports.
  • USMCA’s changes to NAFTA relate to trade rules, not tariffs (since there are virtually no tariffs under NAFTA)—areas that are more difficult for the ITC to quantify.

Summary: What USMCA Does for U.S. Food and Agriculture Producers

  • Further strengthens the United States’ highly productive and integrated agricultural relationship with its North American partners.
  • Includes new chapters, provisions and enforcement mechanisms to ensure and expand Canadian and Mexican market access and prevent arbitrary barriers to our exports.
  • Creates more Mexican consumers with the means to buy U.S. food and agriculture exports by addressing wage disparities and requiring higher wages in critical sectors.

Mark O’Keefe is vice president of editorial services at the U.S. Dairy Export Council.

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