By Russell Boening, Texas Farm Bureau President
No trade agreement is perfect. However, the farm and ranch families of Texas view the United States-Mexico-Canada Agreement (USMCA) as a modernized and improved NAFTA and urge Congress to approve it.
This agreement is critically important to agriculture and many other sectors of the American economy.
Texas sells more than any other state to Mexico and trails only Michigan in exports to Canada. In 2018, trade with our North American partners amounted to $137 billion. That’s 43 percent of what Texas exports to the world. Ratifying USMCA will only add to these numbers.
Trade is vital to the livelihood of American farmers, consumers and the U.S. food industry.
Farm production exceeds domestic demand by 25 percent. In addition, agricultural exports account for 20 percent of farm income and support more than 1 million jobs.
NAFTA was and is a very good agreement for Texas agriculture. It is, however, a quarter-century old, with many aspects deserving a second look. USMCA manages to upgrade NAFTA in important ways. Standards for biotechnology would be enhanced. USMCA would modernize sanitary and phytosanitary standards for agricultural products and reduce trade-distorting policies. Exports to Canada and Mexico would also increase.
There is significant dairy, poultry and egg production in Texas, and USMCA opens new markets in Canada. USMCA ends Canada’s Class 7 dairy pricing scheme. It also provides the U.S. an additional 3.6 percent of Canada’s dairy market, better terms than in previous proposed trade agreements.
USMCA adds provisions to strengthen and fully enforce environmental and labor rules. The agreement requires the practice of labor rights recognized by the International Labor Organization. There are provisions requiring that 40-45 percent of automobile assembly be done by workers earning at least $16 per hour.
USMCA should drive energy independence of the North American continent, since energy trade will be largely duty-free within the agreement. USMCA takes important steps toward protecting intellectual property and trade secrets. No prior U.S. trade agreement has ever had these levels of protection.
Each trade agreement must be decided on its own merits. There is strong bipartisan support for USMCA in Congress, especially in the Texas delegation. Agriculture has been suffering a major economic downturn, with net farm income less than half of the levels recorded in 2013. Passage of USMCA is a desperately needed trade win. It would provide a level of certainty, as farmers are now considering the planting of the 2020 crop and securing operating and equipment loans.
Texas farmers and ranchers believe there is a clear path forward on passing USMCA in Congress. If the deal cannot be made, American agriculture and the entire economy will lose out on a tremendous opportunity for increased prosperity and growth. Additionally, inaction could result in the administration withdrawing from NAFTA, which we strongly oppose. There is no need to go down this road.
There is no conceivable way agriculture can dig out of the current level of financial distress without a free and fair trade environment. Passing a new, updated and improved free trade agreement for the North American continent is a vital first step.
Texas Farm Bureau strongly urges immediate passage of USMCA. Farm and ranch families are depending on it.
Boening is president of the Texas Farm Bureau. He is a fourth-generation farmer from Poth in Wilson County. He grows watermelons, grains and cotton and operates a dairy and beef cattle herd. This opinion originally appeared in the Houston Chronicle on Nov. 14.