(KEYC) — The United States-Mexico-Canada trade agreement is set to go into effect Wednesday, replacing the 26-year-old North American Free Trade Agreement.
As trade halted across the world amid the COVID-19 pandemic, the USMCA trade deal provides stability for producers across the country during uncertain times.
“We’re talking about a half a billion people, trillions of dollars, a billion dollars worth of trade every year with both countries. Agriculture overall did pretty decent with NAFTA, so this will continue to have some stability for our farmers,” Minnesota Department of Agriculture Commissioner Thom Petersen said.
The USMCA trade deal provides a win for producers as trade deal progression with China continues to falter.
“Canada is very important in the livestock industry, very important in the wheat industry, Mexico is extremely important to the hog industry, this is very important for area farmers to have a good trade agreement and keep open trade relations with Canada and Mexico,” said Kent Thiesse, farm management analyst with MinnStar Bank.
A local dairy producer says the USMCA evens the playing field between Canada and the U.S. regarding the classification of dairy products.
“They will have to eliminate classes six and seven dairy products which are skim milk powder and milk protein concentrate,” said Steve Hoffman, a dairy producer in New Ulm.
Hoffman said the agreement would no longer allow Canada to sell those products to Mexico at a reduced rate and give U.S. trade officials the ability to monitor the products Canada is trading to other countries.
Hopes are the agreement stabilizes the ethanol market as well.
“This past week, Mexico bought some ethanol, that’s really some positive news, too, for our farmers,” said Petersen.
Petersen said he met with ambassadors from Canada and Mexico to keep the trade relationship strong.