Government

Former Iowa Gov. Vilsack to Congress: Ratify USMCA, help farmers

Former USDA secretary Tom Vilsack speaks during a roundtable discussion on the United States-Mexico-Canada Agreement at the Cedar Rapids Metro Economic Alliance on Monday, June 17, 2019. (Liz Martin/The Gazette)
Former USDA secretary Tom Vilsack speaks during a roundtable discussion on the United States-Mexico-Canada Agreement at the Cedar Rapids Metro Economic Alliance on Monday, June 17, 2019. (Liz Martin/The Gazette)
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Two-term former Iowa Gov. Tom Vilsack said Monday it is critical that Congress ratify the proposed United States-Mexico-Canada, or USMCA, trade pact to protect those farmers’ jobs and the resulting exports.

U.S. lawmakers also could use momentum from ratifying USMCA to reach new agreements with China, Japan and other key trading partners, said Vilsack at roundtable events with Iowa agriculture and business representatives in Urbandale and in Cedar Rapids.

Vilsack, who served eight years as U.S. secretary of agriculture in the Obama administration, said Congress should prioritize ratifying USMCA in 2019, and the sooner the better, given federal budget debates in the United States expected in September and October.

“If we extend into 2020, (the agreement) gets mixed up in presidential and Congressional politics and makes it much, much less likely to get a vote in Congress,” he said at the Cedar Rapids Metro Economic Alliance’s headquarters during his Cedar Rapids stop.

Vilsack, now president of the U.S. Dairy Export Council, said the agreement would benefit his industry by preserving tariff-free market access for dairy products in Mexico, which he said receives 30 percent of U.S. dairy exports. It also would end a Canadian pricing system that limits imports of some dairy products.

Gretta Irwin, executive director of the Iowa Turkey Foundation, said at the Cedar Rapids event that USMCA would bolster security for Iowa farmers, whom she said make the state the fifth-largest turkey processor and eighth-largest turkey producer nationwide.

Mexico receives the most turkey exports while Canada takes in the fourth-most exports, she said.

The agreement “adds flexibility and more profitability to our industry here in the state of Iowa,” Irwin said.

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The United States sends about $1.8 billion in beef to Canada and Mexico each year, said Casey Allison, membership coordinator for the Iowa Cattlemen’s Association. Ratifying the agreement would help U.S. cattle farmers capitalize on the resources they have to generate high-quality products, including new technology and genetics, he said.

“If we can’t get those products to our trade partners, then we’re really hamstrung,” Allison said at the Cedar Rapids Metro Economic Alliance session. “We really look to USMCA to make sure that we maintain strong partnerships with Canada and Mexico, among other countries.”

Vilsack said he believes the Trump administration is holding off on sending the trade agreement to Capitol Hill until it has secured the votes for passage. But he expressed concern that many are not taking a holistic view of the importance the USMCA has for the 43 million jobs and 20 percent of the U.S. economy tied to the food and agriculture industry.

Members of the Democratic-led U.S. House of Representatives have pushed for more time to review the agreement, citing a need to improve enforcement mechanisms for labor and environmental standards.

Iowa agriculture groups could make a “powerful” case for federal lawmakers to move on USMCA by asking them if the new agreement is better than the current North American Free Trade Agreement, Vilsack said.

If they answer “yes,” as he believes is the case, “Why wouldn’t you vote for an improvement?”

Should President Donald Trump scrap NAFTA, which he previously called “one of the worst trade deals ever made,” without USMCA in place, Vilsack said the result could “catastrophic,” and entail new tariffs and trade barriers for farmers already struggling economically due to market uncertainty and depressed prices.

“There’s a lot of uncertainty out in the countryside and a lot of angst,” Vilsack said at the Machine Shed restaurant roundtable in Urbandale. “Having this agreement pass creates optimism, creates hopefulness about the future, which is really important.”

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Kevin Studer, the federal policy liaison for the Iowa Corn Growers, echoed Vilsack’s concerns, telling the Urbandale gathering that “my farmers need a break.”

“This spring has been a mess (because of the weather). We all know it,” he said. “We’ve got to get this anxiety off the table. Let’s clear the deck on USMCA. Let’s get our trade people being able to get China done, and let’s just get these guys some certainty in the market. I think that sums it up.”

Multiple “stumbling blocks” no longer exist to USMCA ratification, Vilsack said, citing U.S. steel and aluminum tariffs on Canada and Mexico — which were lifted in May — and Trump’s threats, abandoned shortly thereafter, to impose tariffs on Mexican goods over immigration.

Now, he said, there’s potential for a “grand bargain” between Congress and the president.

“Congress needs to understand and appreciate the full consequences of their votes,” Vilsack said. “There’s a lot riding on this particular vote and the more people understand that, the easier it is for them to get to yes.”

USMCA vs. NATFA

Some of the major changes under the proposed USMCA from NAFTA include:

• Canada would open its dairy market to U.S. farmers.

• By 2023, some 40 to 45 percent of auto parts would be required to be made by employees paid a minimum of $16 an hour. Also, to qualify for zero tariffs, cars would need to have 75 percent of their parts made in one of the three participating nations.

• Among intellectual property changes, new regulations would be set involving digital products. But duties would be prohibited on e-books and music. In addition, internet companies wouldn’t be liable for content that is created by users.

• The deal is subject to review every six years and has a sunset clause of 16 years.

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Link: A fact sheet created by the Office of the U.S. Trade Representative

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