House approval of the NAFTA reboot has been welcomed as a success by Montana lawmakers and given mixed reviews by farmers and ranchers.
The U.S., Mexico and Canada Trade Agreement passed Thursday offered hope that Montana wheat was closer to receiving fair market value at Canadian elevators. Montana is the nation’s third largest wheat producing state, behind North Dakota and Kansas. Hi-Line farmers have for years wanted the option of the selling their grain in Canada at a fair market price. But Canada’s short list of acceptable grain varieties doesn’t include U.S. types. Montana wheat has been reduced to feed status as a result.
With the USMCA freshly passed in the House, it appeared wheat farmers still had negotiating to do with their northern neighbors. Michelle Erickson-Jones was optimistic. The past president of the Montana Grain Growers said getting the trade agreement settled would make it easier to deal with nagging trade issues dating back to the 1993 North American Free Trade Agreement. USMCA is regarded as a NAFTA reboot.
“We producers in Montana benefit from having USMCA. It’s an update because it levels up the playing field between us and Canada,” Erickson-Jones said.
The U.S. Trade Commission report on USMCA says the language on wheat trade has become more specific in guaranteeing that U.S. wheat will be treated like Canadian wheat at Canadian elevators. Country-of-origin requirements for wheat are eliminated. U.S. beer exports to Canada are expected to improve modestly.
Montana barley farmers are also deeply dependent on Mexican brewers buying malt. Grupo Modelo reserves space at Malteurop in Great Falls so the ingredients for Modelo’s Mexican beer are made to spec, Erickson-Jones said.
Montana’s $100 million-a-year sugar beet industry will get more competition from Canadian imports under USMCA. Sugar beet and cane sugar groups are in perpetual battle with big candy and confection lobbying groups about how much foreign sugar should be allowed into the United States. The imports drive the price down and the U.S. Department of Agriculture enforces a sugar quota system to support domestic prices. Mexico is the largest foreign exporter of sugar to the United States, but USMCA will allow more access for Canadian sugar. The U.S. sugar quota system remains.
Trade terms for Canadian and Mexican cattle entering the United States weren’t settled in favor of U.S. ranchers, said the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America. Better known as R-CALF USA, the Billings-based group said the USMCA didn’t support country-of-origin labeling for beef, something ranchers have preferred for more than a decade. COOL, as the labeling program is known, was briefly applied before being shut down over threats from Canada of tariffs on U.S. products.
"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,” said Bill Bullard, R-CALF USA CEO in a press release.
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The House version must be reconciled with a USMCA version in the Senate. Bullard said his group would work on getting COOL language added to the agreement in the Senate.
Montana’s delegation issued statements applauding House passage of the bill.
“The USMCA will help provide much-needed certainty to Montana businesses when it comes to the foreign markets they sell to. With commodity prices at historic lows, we’ve got to give stability to farmers, ranchers, and folks on Main Street," Democratic Sen. Jon Tester said in a prepared statement. "I’m hopeful this deal will do that. I look forward to getting the bill from the House so we can vote on it and send it to the President’s desk, and then turn our attention to brokering new trade agreements with our partners around the world.”
Rep. Greg Gianforte voted in favor of USMCA on Thursday but remained critical of Democratic House Speaker Nancy Pelosi for not bringing the trade agreement to an earlier vote.
“USMCA is a win for Montana and America. The trade deal secures access to our top trading partners, creates 176,000 new American jobs, and increases ag exports by more than $2 billion. USMCA will build upon our already strong national economy,” Gianforte said in a press release. “By putting her partisan impeachment sham ahead of a deal with America’s top trading partners, she revealed her misplaced priorities. I’m grateful to Speaker Pelosi for finally stepping up and doing her job.”
Gianforte voted against impeaching President Trump the day before the USMCA bill.
U.S. Sen. Steve Daines, a member of the Senate Finance Committee, got a first look at the trade agreement months ago and remained a big supporter Thursday.
“After relentless pressure from President Trump for over a year, I’m pleased to see the House pass a critical trade deal for Montana ag,” Daines said in a press release. “I look forward to voting for this trade deal out of the U.S. Senate that will help Montana’s farmers, ranchers, manufacturers and business owners.”