Congress reconvened in September to deliberate the new trade deal with Mexico and Canada.
The trade agreement, known as USMCA, has been a hot topic among farmers and politicians over the past year.
In an Aug. 13 Facebook post, Republican Sen. Roy Blunt endorsed the agreement: "U.S. agricultural & food exports are expected to increase more than $2 billion annually under #USMCA. This trade deal is a win for America’s farmers, ranchers, and businesses."
A spokesperson for Blunt said the number came from a report by the U.S. International Trade Commission, which says the agreement would increase “exports by $2.2 billion (1.1 percent) when fully implemented.”
Billions sounds like a lot. The 1.1%, not so much. We decided to look into this claim.
So, what exactly is the agreement?
The United States-Mexico-Canada Agreement is a trade deal that would replace NAFTA. Mexico ratified the new agreement in June. In Canada, Parliament introduced the bill in May but has insisted on going through the ratification process in tandem with the U.S.
The trick is this: The window for Canada’s ratification is getting smaller, as its federal election is Oct. 21. If the U.S. Congress does not move quickly enough and Canada doesn’t ratify before Sept. 15, it will have to reintroduce the agreement to the next Parliament.
Meanwhile, House Democrats control the agreement’s fate in Congress.
Some call the new deal NAFTA 2.0. One of the big changes to agriculture is dairy. Under the agreement, Canada would increase quotas on dairy and remove restrictions on cheese, said Jonathan Doh, professor at Villanova University School of Business.
But there weren't any other major changes in the agriculture portion from the original NAFTA, according to Pat Westhoff, Food and Agriculture Policy Research Institute director. The deal, if passed, would take effect early 2020.
How does it affect Missouri farmers?
Missouri exports its agriculture all across the world, but the state’s top partners are Canada and Mexico.
In 2017, Missouri’s top agriculture exports were corn and soybeans. Missouri corn ranked No. 6 and soybeans No. 8 in the U.S. in exports, according to state data from the United States Department of Agriculture Economic Research Service. Dairy is not listed in the state’s top agricultural exports.
“It’s important to Missouri to have a strong trade agreement with those countries because about two-thirds of our exports from Missouri go to those two countries,” said Eric Bohl, Missouri Farm Bureau director of public affairs and advocacy. “Canada is our No. 1 export partner. Mexico is our No. 2 export partner.”
Although Doh said the increase was significant, Westhoff said that the 1.1% projected increase is very marginal, in part because dairy is the only agriculture product with a major change. The United States International Trade Commission does not break down the numbers by state.
Blunt said in a Facebook post, "U.S. agricultural & food exports are expected to increase more than $2 billion annually under #USMCA."
The consensus is that the USMCA could increase trade exports by $2.2 billion annually, but that tells only part of the story. The increase is just 1.1% nationally, and probably less for Missouri because the state produces so little dairy.
Still, this claim is correct, so we rate this statement True.