The US-China trade dispute is currently costing soybean producers about $2 a bushel, a former chief economist for the USDA told lenders at the National Agricultural Bankers Conference in Omaha, Nebraska.
Yet, there is good news, too, on trade in the new US Mexico Canada Agreement (USMCA) that could replace NAFTA if it’s approved by Congress, said Joseph Glauber, the former top USDA economist who is now a senior research fellow at the International Food Policy Research Institute.
“I think you could hear a collective sigh of relief by everyone on October 1 when it was announced that we had reached an agreement with Canada,” Glauber said at the Omaha meeting organized by the American Bankers Association. Canada’s commitment to an updated NAFTA followed Mexico’s. It opens some new markets for US dairy exports to our northern neighbor.
Glauber said the new agreement has better ways to resolve trade disputes than the old NAFTA. And it doesn’t put up new trade barriers to existing food exports between the three countries. The main benefit is that it preserves market access for US farmers under the old NAFTA and it did not create new seasonal barriers to exports; something Florida farmers wanted but was opposed by western fruit and vegetable producers, he said.
The US exports about $40 billion worth of food to Canada and Mexico, and those nations ship a similar amount to the US, mainly seasonal produce.
Alas, any benefits from the new NAFTA are swamped by US tariffs on steel and aluminum, which Mexico and Canada are countering with their own tariffs against US pork, dairy and processed foods.
Glauber said he is even more concerned about long-term effects of the trade dispute. It’s sending signals to countries like Brazil to bring more land into production, to produce food stuffs China no longer imports from the US.
Source: agriculture.com
