Food Service & Agriculture and Government

Farmers want Canada in trade agreement

Replacement for NAFTA does not include neighbors to the north.

September 7, 2018
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Although there is a level of uncertainty for a concrete U.S., Mexico and Canada trade agreement, there might be good news for two industries.

In August, President Donald Trump announced The United States-Mexico trade agreement, which was formerly known as the North American Free Trade Agreement and included Canada.

“This is something that is very special for our manufacturers and farmers for both countries, for all of the people who work (in the two sectors),” Trump said in a televised phone conversation with the Mexican president. “Farmers are going to be so happy. Mexico has agreed to purchase as much farm products as possible.”

However, details of the agreement have not been finalized. According to the Washington Post, the agreement includes a 16-year trade deal. A White House representative said the deal likely will be signed in November because there is a 90-day layover period, and Congress will have to approve the agreement.

The news comes as a welcoming sign for manufacturers and farmers, especially farmers in Michigan who have been caught in the tariff feud with the U.S., Canada and Mexico that has been ongoing for months. Mexico and Canada are both one of the state’s top export markets but the latest tariffs placed on agricultural goods, which is between 15 percent and 20 percent, has hurt the state.

According to the Michigan Department of Agriculture and Rural Development, the food and agriculture industry contributes $101.2 billion annually to the state’s economy and it is responsible for 923,000 jobs, which accounts for 22 percent of the state’s employment.

From 2015 to 2017, exports to Mexico were valued at about $281.06 million. The highest valued products were edible vegetables, certain roots and tubers. Together, they were valued at $76.6 million in exports between 2015 to 2017, according to the USDA Foreign Agricultural Service’s Global Agricultural Trade System.

So far in 2018, total export commodities to Mexico are valued at $88.1 million. The highest commodities with tariffs placed on them are valued at $37.9 million, and those are edible prepared meat, fish and crustaceans. Some of the other commodities that have tariffs on them include cheese, meat, cranberries, apples, potatoes and more.

One country that is noticeably missing from the deal is Canada. About 60 percent of Michigan exported goods go to Canada, said Jamie Zmitko-Somers, the international marketing program manager of MDARD.

“They are one of our top trading partners,” Zmitko-Somers said. “We want them in the deal. Tariffs have had an impact (on our agricultural industry).”

From 2015 and 2017, goods valued at $3.2 billion were exported to Canada. The highest valued goods during that time were edible vegetables, certain roots and tubers, valued at $503.8 million.

So far this year, goods that have been exported to Canada were valued at $470.4 million. The highest valued commodities are prepared cereals, flour, starch or milk and bakers ware, valued at $82.7 million.

Tariffs have been imposed on beans, peanuts, corn, cereal, grains, vegetables, fruits, nuts, whiskies and a lot more commodities that are exported to Canada.

Trump said he will begin negotiations with Canada that could be a separate U.S.-Canada trade deal instead of a NAFTA. He said Canada has over 300 percent of tariffs on U.S. dairy products.

“We will have a deal with Canada,” Trump said. “It will either be tariffs on cars or it will be a negotiated deal. Frankly, tariffs on cars will be a much easier deal but, perhaps, the other one will be much better for Canada.”

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