BOISE — Frank Muir, president of the Idaho Potato Commission, said the new North American trade agreement signed by President Trump Wednesday “levels the playing field for Idaho potato farmers.”
The U.S.-Mexico-Canada Agreement trade pact is Trump’s replacement for the North American Free Trade Agreement, which took effect in 1994, according to the Associated Press. The USMCA is designed to update the 26-year-old trade agreement to consider the rise of e-commerce and other technological changes. It also aims to encourage factories to move production to the United States, AP reported.
The agreement grants the U.S. tariff-free access to the Canadian dairy market, and U.S. farmers can now sell more of their agricultural products in Canada without being subject to Canadian limits on imports of some products, AP reported.
“The major change that greatly impacts us is the removal of these tariffs,” Muir told the Idaho Press in a phone call Wednesday. “When they were in place, they were making U.S. potatoes less competitive in Mexico. Mexico was shipping frozen products from Canada. This levels the playing floor. With (the USMCA), we can compete.”
Xiaoxue Du, a University of Idaho professor in the Department of Agricultural Economics and Rural Sociology, told the Idaho Press in an email that the new pact will help Idaho’s dairies, wheat industry and potato farmers, but she is not yet sure by how much.
“Canada and Mexico are the largest two trade partners for Idaho potatoes,” Du said in an email. “Under USMCA, reducing the use of trade-distorting policies will help potato farmers.”
Du added that, under the USMCA, the U.S. will have more competitive milk prices and U.S. dairy will have access to the market in Canada.
“That opens up opportunities for Idaho cheese exports, for example,” she said.
Idaho exported $356 million worth of dairy products in 2017, according to a report from the University of Idaho.
In 2017 the value of Idaho potato production totaled $975 million, and exports added nearly 10 percent of the production value. The top international market for Idaho dairy in 2017 was South Korea, which makes up 20 percent of Idaho dairy exports; Mexico made up 10 percent and Canada made up 9 percent. In 2017 Idaho potato exports to Canada accounted for 44 percent of Idaho’s potato exports, and Mexico accounted for 27 percent.
U.S. GOP Sens. Jim Risch and Sen. Mike Crapo of Idaho called Trump’s signing of a new trade agreement “a victory for Idaho and all of America” in a joint press release on Wednesday.
“Idaho’s ag producers and manufacturers have waited a long time for a trade deal that delivers truly free and fair trade,” Risch said in the release. “The USMCA is a victory for Idaho and all of America and its signature into law will herald in a new chapter of even greater economic opportunity and success. I thank and congratulate the Trump administration on making this historic trade deal a reality.”
Crapo thanked Trump and U.S. Trade Representative Robert Lighthizer for their negotiations around the USMCA. He added, “Signing this agreement into law is a step forward in ensuring improved access to valuable export opportunities for Idaho’s farmers and ranchers.”
The agreement comes in the midst of President Trump’s impeachment trial in the Senate. Thursday is senators’ second and final day of questioning House managers and White House lawyers.
MORE DETAILS OF THE DEAL
The new trade agreement also increases the percentage of a car and its parts that must come from within North America, from 62.5 percent to 75 percent, to qualify for USMCA’s duty-free benefits. More parts are required come from the U.S., Canada and Mexico, rather than China and elsewhere, AP reported.
The agreement requires that 40 percent of vehicles would have to originate in places where workers earn at least $16 an hour. That would benefit the United States or Canada, according to AP.
In their press release, Risch and Crapo said the agreement “provides Idaho farmers, ranchers and small businesses with new trading pathways for commodities like dairy” and preserves “existing channels for top Idaho exports like potatoes, canola and beef cattle.”
“In Idaho, processing frozen potatoes is critical for our international export business to continue growth that we are experiencing,” Muir said.
Muir also applauded Risch “and all of our delegates from Idaho to get tariffs removed and sign a deal.”
The National Potato Council in Washington, D.C., sent a press release welcoming the signing of the new agreement. The press release said the USMCA, the U.S.-Japan agreement and the U.S.-China Phase One Agreement “will expand four of the top 10 export markets for U.S. potatoes and potato products, resulting in hundreds of millions of dollars in potential growth for the U.S. potato industry.”