After Trump drops tariff threat against Mexico, U.S. produce associations push for USMCA passage

June 12 , 2019

There has been a flurry of political activity during the past several days, with U.S. President Trump first threatening to implement tariffs on all imported Mexican goods – potentially jeopardizing negotiations for the U.S.-Mexico-Canada Agreement (USMCA) – and then the tariffs being called off on Friday in a joint communique issued by the U.S. and Mexico.

The official statement provided few details, said Reuters. Still, players in the produce industry were quick to celebrate the victory, pointing out its positive implications for the USMCA passage.

Western Growers, for example, commented: “We are pleased that this potential impediment to trade between our two countries has been avoided. Mexico represents one of the largest export markets for U.S. agricultural goods, and any tit-for-tat escalation of tariffs would be devastating for American farmers, in particular given the current barriers to access to Chinese markets.”

It added that: “As significant as this deal is in maintaining our regular flow of trade with Mexico, it is equally critical in clearing the pathway for passage and implementation of the U.S.-Mexico-Canada Agreement (USMCA). Like NAFTA before it, the USMCA maintains zero-tariff treatment for all produce, a provision that led to the tripling of U.S. exports to Mexico over the past 25 years.”

The U.S. Apple Association also spoke out on the necessity of the passage of the USMCA. Together, with nearly 1,000 food and agriculture organizations, the association sent a letter to congressional leaders in the U.S., urging them to ratify the trade deal.

In the statement, U.S. Apple President & CEO Jim Bair commented: “Mexico and Canada are top export markets for apples, totaling nearly a half-billion dollars in annual sales.

“The United States-Mexico-Canada Agreement (USMCA) is good for apples as it maintains duty-free access and other important provisions from the North American Free Trade Agreement (NAFTA), including dispute resolution. Apples were a big winner under NAFTA, which quadrupled exports to Mexico and doubled those to Canada. Maintaining these trading partnerships under the USMCA is critical to the health of the apple industry.

“Free trade in the North American market brought billions of dollars in sales to apple growers. It’s not an overstatement to say our vitality depends on continued free trade so we’re calling on Congress to ratify the USMCA as quickly as possible.”

Regarding the agreement the U.S. and Mexico allegedly reached concerning tariffs and immigration, Trump tweeted on Monday: “We have fully signed and documented another very important part of the Immigration and Security deal with Mexico”.

Yet, the Mexican foreign minister said that same day that no secret immigration deal existed between his country and the U.S., directly contradicting President Trump’s claim on Twitter, according to the New York Times.

Instead, Marcelo Ebrard, Mexico’s top diplomat, said at a news conference in Mexico City that there was an understanding that both sides would evaluate the flow of migrants in the coming months. If the number of migrants crossing the U.S. border was not significantly reduced, both sides had agreed to renew discussions about more aggressive changes to regional asylum rules that could have a bigger effect, he noted.

While an official agreement regarding these issues have yet to be reached, Mexico still expects to ratify the USMCA trade deal next week, said President Andrés Manuel López Obrador. The president explained that Mexico’s Senate would hold a session in a week’s time in which the ratification of the trade deal would be discussed.

“I can assure you that next week, the Senate will ratify this,” The Financial Times quoted López Obrador saying.

U.S. House Democrats are expressing optimism as well as they begin what could be the final stage of negotiations to approve the U.S.-Mexico-Canada trade agreement, stated Bloomberg.

It added that Chairman Richard Neal, the Massachusetts Democrat leading talks with U.S. Trade Representative Robert Lighthizer, said Monday he hopes a deal can be finalized within 30 days.

The Trump administration has signaled plans to send a bill implementing the USMCA to Congress by the end of the month to prod lawmakers to vote on it before the August recess, the publication said.

 

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