Washington, DC—The trade rollercoaster shows no signs of slowing down, between governmental aid that isn’t enough and a deal to replace NAFTA that’s giving us greater access to Canada’s dairy market.
The Wall Street Journal reported that the United States Department of Agriculture (USDA) has already paid out $35 million to farmers, but the farmers that Jesse Newman, author of the article, interviewed have said that the money they’re eligible for is nowhere near what they would have made through trade. And, of course, having that many unsold goods drives down the prices of said goods.
Meanwhile, another WSJ article says that while confronting China is a necessary fight, resolutions aren’t happening as quickly as agricultural leaders would like. If it takes too long, Brazil might expand soybean production, taking up a part of the market that U.S. farmers would have a hard time getting back.
On the other hand, NAFTA could be replaced with the U.S.-Mexico-Canada Agreement (USMCA). Among other benefits, according to the New York Times (NYT), Canada provided increased access to its dairy market. A third WSJ article says that the agreement is expected to preserve billions of dollars in farm goods traded annually. While it does not lift the tariffs the three countries have placed on each other, the NYT says, Mexico and Canada expect the tariffs to be worked out separately.
The Produce Coalition for NAFTA, a group of U.S. and Canadian agricultural companies in support of the modernization of NAFTA, released a statement commending the Trump Administration and the Trudeau Administration for bringing Canada into the USMCA, and thanking the Mexican Economy Minister for helping them reach an agreement. They said that the trade agreement will “enhance U.S. agricultural exports and build on the success of the NAFTA agreement.” The release also said that they would be working with Congress to ensure ratification of the agreement.
All three countries have managed to agree, potentially closing one front in the U.S.’s trade war.
That said, the NYT points out in a separate article that it can be renegotiated fairly often, which would undermine confidence in trade, and uncertainty and the economy don’t play nice together. And, of course, while Mexico and Canada intend to work out the tariffs, there’s no guarantee that it’ll happen.
Until perfection becomes a realistic goal, though, good news is still worth celebrating.