Tag Archives: NAFTA

Washington, D.C. April 19, 2019.  While the International Trade Commission (ITC) report on the United States-Mexico-Canada Agreement (USMCA) demonstrated marginal increases in agricultural exports, the value of USMCA to soybean producers goes beyond the pages released yesterday. The report is a good tool, yet it does not account for valuable non-tariff provisions in the “new NAFTA” –or look back historically on the myriad benefits to agriculture since NAFTA’s inception.

Davie Stephens, soy grower from Clinton, Kentucky, and American Soybean Association (ASA) president said, “USMCA builds upon the strong foundation set by the original NAFTA. Under NAFTA, the value of agricultural exports to Canada and Mexico increased to roughly $43 billion each year. Soybean exports to Mexico quadrupled under NAFTA, making Mexico the number two market for U.S. soybeans, meal and oil. We also saw a doubling of soybean exports to Canada, making it the number four market for soybean meal and the number seven market for soybean oil.”

Stephens continued, “We know that the modernizations included in USMCA will make trade with our North American neighbors even smoother. These non-tariff enhancements include the highest enforceable sanitary and phytosanitary (SPS) standards of any trade deal to date, an enforceable biotechnology chapter that supports 21st century innovations, and create a rapid response mechanism to address trade challenges. These provisions not only serve to update the North American agreement but set a paradigm for future free trade agreements.”

While continuing to review and assess the ITC, the American Soybean Association reaffirms its support for USMCA and urges Congress to pass the agreement once the bill arrives. Passage of USMCA is vital to ensuring continued trade with two of U.S. soybeans’ top trading partners, Canada and Mexico.

The Congressional Research Service is looking into whether or not President Trump can legally withdraw from the North American Free Trade Agreement on his own. Politico says it’s a question the trade world would like an answer to sooner rather than later.

Can the president withdraw without Congressional support? Politico says the answer is not clear. Congresses’ research arm says, if you look solely at international law, it looks like the Trump Administration would be able to act on its own. However, it’s quite likely that the president would have problems based on domestic law. It’s difficult to say how a court case would get resolved if affected companies pursued litigation. Trump has threatened to withdraw from the original NAFTA agreement as a way to put pressure on Congress to pass the U.S.-Mexico-Canada agreement.

Administration aides have told Politico that there are no immediate plans to back out of the existing deal. One factor that might increase the possibility of legal action is if Congress signals disapproval of any attempt to withdraw from NAFTA. In the past, the Supreme Court typically says presidential power to act unilaterally is at its weakest when the White House takes action that Congress doesn’t agree with.