Not So Neighborly…
Eight months after the activation of the USMCA [the new North American Free Trade Agreement, NAFTA], the U.S. is raising concerns on some hot trade topics with its neighbors to the north and south. And it’s not just the burnt brisket at the neighborhood barbeque.
Very recent bans of glyphosate and GMO corn have the U.S. up in arms. The goals to eliminate genetically-modified varieties by 2024 left Mexico with some explaining to do to its #1 corn provider.
With 15 billion tonnes of corn worth $2.7 billion on the line, Secretary of Agriculture Tom Vilsack assured friendly ag relations were still in place:
But don’t count on Mexico for the potato salad, though: Mexico’s Supreme Court is in the process of determining if fresh U.S. potatoes can be sold in the country, a market opportunity of $200 million per year.
And Canada’s burger isn’t topped with American cheese: Trade complaints are still in process as U.S. dairy groups hurl criticism at Canada for shaking hands on the USMCA with their fingers crossed behind their back.
Tariff-rate quotas [TRQs] that would enable a flow of new U.S. dairy exports and expand supply options to Canadian retailers and distributors aren’t being implemented as agreed upon.
Long story short… The value-add U.S. dairy products that sell for big bucks aren’t getting the light of day in Canadian channels. 85% of exports to Canada are lower-value milk products sent to processors. Put in context by Krysta Harden, CEO of the U.S. Dairy Export Council,
“Canada needs to stop manipulating its dairy TRQs; its actions have not only negatively impacted U.S. dairy farmers and manufacturers, but also constrained many Canadian companies from being able to make use of these new TRQs to expand their supply options.”