U.S. Trade Representative (USTR) Katherine Tai hosted leaders from Canada and Mexico this week for the first U.S.-Mexico-Canada Agreement (USMCA) commission meeting. While they discussed a few pain points regarding Mexico’s trade barriers and Canada’s protections for the country’s dairy industry, the outlook for grains under the agreement remains stable for now.
During the virtual meeting, Tatiana Clouthier, Mexican Secretary of Economy, and Mary Ng, Canada Minister of Small Business, Export Promotion and International Trade, received updates about work already underway to advance cooperation under the agreement and discussed USMCA’s new labor and environmental obligations.
“USMCA, like NAFTA before it, is foundational to our global trade policy. Through USMCA, Mexico and Canada offer significant additional potential for growth,” U.S. Grains Council (USGC) President and CEO Ryan LeGrand said.
Because free trade agreements (FTAs) help expand market access and exports for U.S. coarse grains and co-products, the Council represents the U.S. feed grains industry in international trade negotiations in which the United States participates. The U.S. has FTAs with 20 countries that purchase more than half of U.S. grains in all forms exports.
USMCA entered into force on July 1, 2020, to improve agricultural market access and promote freer, fairer trade between the three countries. It also provides the framework needed to turn ongoing market development activities into realized sales by:
– maintaining zero tariffs on U.S. coarse grains, co-products and ethanol;
– providing the highest enforceable sanitary and phytosanitary standards in any trade agreement to date;
– addressing regulatory equivalence, science and risk analysis, transparency and cooperative technical consultations;
– creating a rapid-response mechanism to address trade disputes;
– modernizing border procedures; and
– adding an enforceable biotechnology chapter, the first ever in a U.S. trade agreement.
According to USDA export sales and shipment numbers as of May 13, Mexico was second only to China in both U.S. corn and sorghum export sales and shipments. The country had 10,222,300 MT in corn shipments (402.43 million bushels) for the 2020/2021 marketing year and 3,960,100 MT in corn sales (155.9 million bushels) for a total of 14,182,400 MT (558.33 million bushels). U.S. sorghum shipments to Mexico stand at 277,000 MT (10.9 million bushels) for the 2019/2020 marketing year. By commodity, in 2019/2020, Mexico was also the top buyer of U.S. distiller’s dried grains with solubles (DDGS) and barley/barley products, as well as the seventh-largest global market for U.S. ethanol.
Canada was the fourth-largest buyer of U.S. grains in all forms (GIAF) in the 2019/2020 marketing year with imports of more than 7.07 million metric tons (equivalent to 278.3 million bushels), valued at $3.08 billion. By commodity, Canada ranked as the largest buyer of U.S. ethanol, second-largest buyer of U.S. barley/barley products, sixth-largest buyer of U.S. corn and eighth-largest buyer of U.S. DDGS.
The Council will continue to monitor updates regarding the USMCA commission meetings as they develop.
About The U.S. Grains Council
The U.S. Grains Council develops export markets for U.S. barley, corn, sorghum and related products including distiller’s dried grains with solubles (DDGS) and ethanol. With full-time presence in 28 locations, the Council operates programs in more than 50 countries and the European Union. The Council believes exports are vital to global economic development and to U.S. agriculture’s profitability. Detailed information about the Council and its programs is online at www.grains.org.