Agricultural Provisions of the U.S.-Mexico-
April 3, 2019
Canada Agreement
Anita Regmi
On September 30, 2018, the Trump Administration announced the conclusion of the
Analyst in Agricultural
renegotiations of the North America Free Trade Agreement (NAFTA) and the proposed United
Policy
States-Mexico-Canada Agreement (USMCA). If approved by Congress and ratified by Canada

and Mexico, USMCA would modify and possibly replace NAFTA, which entered into force
January 1, 1994. NAFTA provisions are structured as three separate bilateral agreements: one

between Canada and the United States, a second between Mexico and the United States, and a
third between Canada and Mexico.
Under NAFTA, bilateral agricultural trade between the United States and Mexico was liberalized over a transition period of
14 years beginning in 1994. NAFTA provisions on agricultural trade between Canada and the United States are based on
commitments under the Canada-U.S. Trade Agreement (CUSTA), which granted full market access for most agricultural
products with the exception of certain products. The agricultural exceptions under NAFTA include Canadian imports from
the United States of dairy products, poultry, eggs, and margarine and U.S. imports from Canada of dairy products, peanuts,
peanut butter, cotton, sugar, and sugar-containing products.
The proposed USMCA would expand market access for U.S. exports of dairy, poultry, and eggs to Canada and enhance
NAFTA’s Sanitary and Phytosanitary (SPS) provisions. It would also include new provisions for trade in agricultural
biotechnology products, add provisions governing Geographical Indications (GIs), add protection for proprietary food
formulas, and require USMCA countries to apply the same regulatory treatment to imported alcoholic beverages and wheat
as those that govern their domestic products.
Since 2002, Canada has been the United States’ top agricultural export market, and Mexico was the second-largest export
market until 2010, when it became the third-largest market as China became the second-largest agricultural export market for
the United States. U.S. agricultural exporters are thus keen to keep and grow the existing export market in North America. If
the United States were to potentially withdraw from NAFTA, as mentioned several times by President Trump, U.S.
agricultural exporters could potentially lose at least a portion of their market share in Canada and Mexico if the proposed
USMCA does not enter into force. If the United States withdraws from NAFTA, U.S. agricultural exports to Canada and
Mexico would likely face World Trade Organization (WTO) most-favored-nation tariffs—the highest rate a country applies
to WTO member countries. These tariffs are much higher than the zero tariffs that U.S. exporters currently enjoy under
NAFTA for most agricultural exports to Canada and Mexico.
The proposed USMCA would need to be approved by the U.S. Congress and ratified by Canada and Mexico before it could
enter into force. Some Members of Congress have voiced concerns about issues such as labor provisions and intellectual
property rights protection of pharmaceuticals. Other Members have indicated that an anticipated assessment by the U.S.
International Trade Commission (USITC) will be key to their decisions on whether to support the agreement. Canada,
Mexico, and some Members of Congress have expressed concern about other ongoing trade issues with Canada and Mexico,
such as antidumping issues related to seasonal produce imports and the recent U.S. imposition of a 25% duty on all steel
imports and a 10% duty on all aluminum imports. Both the Canadian and the Mexican governments have stated that USMCA
ratification hinges in large part upon the Trump Administration lifting the Section 232 tariffs on imported steel and
aluminum. Similarly, some Members of Congress have stated that the Administration should lift tariffs on steel and
aluminum imports in order to secure the elimination of retaliatory tariffs on agricultural products before Congress would
consider legislation to implement USMCA.

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Introduction
Since 2002, Canada has been the United States’ top agricultural export market. Mexico was the
second-largest export market until 2010, when China displaced Mexico as the second-leading
market with Mexico becoming the third-largest U.S. agricultural export market. In FY2018, U.S.
agricultural exports totaled $143 billion, of which Canada and Mexico jointly accounted for about
27%. USDA’s Economic Research Service estimates that in 2017 each dollar of U.S. agricultural
exports stimulated an additional $1.30 in business activity in the United States. That same year,
U.S. agricultural exports generated an estimated 1,161,000 full-time civilian jobs, including
795,000 jobs outside the farm sector.1 U.S. agricultural exports to Canada and Mexico are an
important part of the U.S. economy, and the growth of these markets is partly the result of the
North American market liberalization under the North American Free Trade Agreement
(NAFTA).2
On September 30, 2018, the Trump Administration announced an agreement with Canada and
Mexico for a U.S.-Mexico-Canada Agreement (USMCA) that would possibly replace NAFTA.
NAFTA entered into force on January 1, 1994, following the passage of the implementing
legislation by Congress (P.L. 103-182).3 NAFTA was structured as three separate bilateral
agreements: one between Canada and the United States, a second between Mexico and the United
States, and a third between Canada and Mexico.4
Provisions of the Canada-U.S Trade Agreement (CUSTA), which went into effect on January 1,
1989, continued to apply under NAFTA (see Table 1). CUSTA opened up a 10-year period for
tariff elimination and agricultural market integration between the two countries. The agricultural
provisions agreed upon for CUSTA remained in force as provisions of the new NAFTA
agreement. While tariffs were phased out for almost all agricultural products, NAFTA (in
accordance with the original CUSTA provisions) exempted certain products from market
liberalization. These exemptions included U.S. imports from Canada of dairy products, peanuts,
peanut butter, cotton, sugar, and sugar-containing products and Canadian imports from the United
States of dairy products, poultry, eggs, and margarine. Canada liberalized its agricultural sector
under NAFTA, but liberalization did not include its dairy, poultry, and egg product sectors, which
continued to be governed by domestic supply management policies and are protected from
imports by high over-quota tariffs.
Quotas that once governed bilateral trade in these commodities were redefined, under NAFTA, as
tariff-rate quotas (TRQs) to comply with the Uruguay Round Agreement on Agriculture (URAA),
which took effect on January 1, 1995.5 A TRQ is a quota for a volume of imports at a favorable
tariff rate, which was set at zero under NAFTA. Imports beyond the quota volume face higher
over-quota tariff rates.

1 USDA, Economic Research Service (ERS), Effects of Trade on the U.S. Economy, 2017 Data Overview.
2 S. Zahniser and J. Link, Effects of North American Free Trade Agreement on Agriculture and the Rural Economy,
ERS, WRS-02-1, July 2002.
3 For more information on NAFTA and the proposed USMCA, see CRS In Focus IF10047, North American Free Trade
Agreement (NAFTA), by M. Angeles Villarreal; and CRS In Focus IF10997, Proposed U.S.-Mexico-Canada (USMCA)
Trade Agreement, by Ian F. Fergusson and M. Angeles Villarreal.
4 S. Zahniser et al., NAFTA at 20: North America’s Free-Trade Area and Its Impact on Agriculture, ERS, WRS-15-01,
February 2015.
5 The URAA established the World Trade Organization (WTO) on January 1, 1995. For a discussion of U.S.
agricultural commitments under the WTO, see CRS Report RL32916, Agriculture in the WTO: Policy Commitments
Made Under the Agreement on Agriculture, by Randy Schnepf.
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Table 1. Chronology of North American Agricultural Market Liberalization
January 1989
Canada-United States Trade Agreement implemented.
January 1994
NAFTA enters force, tariffs eliminated for many products, including:

U.S. tariffs on Mexican corn, sorghum, barley, soymeal, pears, peaches, oranges, fresh
strawberries, beef, pork, poultry, most tree nuts, and carrots; and

Mexican tariffs on U.S. sorghum, fresh strawberries, oranges, other citrus, carrots, and
most tree nuts.
January 1998
Completion of 10-year transition period between Canada and the United States.

Remaining Canadian tariffs on U.S. products eliminated, except for exempted products
such as dairy, poultry, and eggs.

Remaining U.S. tariffs on Canadian products removed, except for dairy products,
peanuts, peanut butter, cotton, sugar, and sugar-containing products.

U.S. tariffs eliminated on Mexican non-durum wheat, soy oil, cotton, and oranges.

Among others, Mexican tariffs eliminated on imports of U.S. pears, plums, apricots,
and cotton.
January 2003
Completion of nine-year transition period under NAFTA between Mexico and the
United States.

Among others, U.S. tariffs eliminated on imports of Mexican durum wheat, rice, dairy,
winter vegetables, frozen strawberries, and fresh tomatoes.

Among others, Mexican tariffs eliminated on imports of U.S. wheat, barley, soybean
meal and soybean oil, rice, dairy products, poultry, hogs, pork, cotton, tobacco,
peaches, apples, oranges, frozen strawberries, and fresh tomatoes.
January 2008
Completion of 14-year transition period under NAFTA between Mexico and the
United States. In 2008, the remaining few tariffs were removed.

U.S. tariffs eliminated on imports of Mexican frozen concentrated orange juice, winter
vegetables, sugar, and melons.

Mexican tariffs eliminated on imports of U.S. corn, sugar, dried beans, milk powder,
high fructose corn syrup, and chicken leg quarters.
May 2017
Trump Administration sends a 90-day notification to Congress of its intent to
renegotiate and modernize NAFTA.
August 2017
Renegotiation talks begin.
September 30, 2018
Trump Administration sends a 90-day notification to Congress of its intent to enter
into an agreement with Mexico and Canada to modify and modernize NAFTA.
November 30, 2018
President Trump and presidents of Canada and Mexico sign proposed USMCA.
April 2019
U.S. International Trade Commission report assessing potential economic impacts of
USMCA submission to the President and Congress expected.
Source: For NAFTA, S. Zahniser and J. Link, Effects of North American Free Trade Agreement on Agriculture and the
Rural Economy, Economic Research Service, WRS-02-1, July 2002; H. Brunke and D. A. Sumner, “Role of NAFTA
in California Agriculture: A Brief Review,” University of California, AIC Issues Brief# 21, February 2003; S.
Zahniser and Z. Crago, NAFTA at 15: Building on Free Trade, USDA Report WRS-09-03, March 2009; and CRS
Report R44981, NAFTA Renegotiation and the Proposed United States-Mexico-Canada Agreement (USMCA), by M.
Angeles Vil arreal and Ian F. Fergusson.
The United States and Mexico agreement under NAFTA did not exclude any agricultural products
from trade liberalization. Numerous restrictions on bilateral agricultural trade were eliminated
immediately upon NAFTA’s implementation, while others were phased out over a 14-year period.
Remaining trade restrictions on the last handful of agricultural commodities (such as U.S. exports
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to Mexico of corn, dry edible beans, and nonfat dry milk and Mexican exports to the United
States of sugar, cucumbers, orange juice, and sprouting broccoli) were removed upon the
completion of the transition period in 2008.6 Under NAFTA, Mexico eliminated all the tariffs and
quotas that formerly governed agricultural imports from the United States.
In addition to directly improving market access, NAFTA set guidance and standards on other
policies and regulations that facilitated the integration of the North American agricultural market.
For example, NAFTA included provisions for rules of origin, intellectual property rights, foreign
investment, and dispute resolution. NAFTA’s sanitary and phytosanitary (SPS) provisions made a
significant contribution toward the expansion of agricultural trade by harmonizing regulations
and facilitating trade.7 Because NAFTA entered into force before URAA, NAFTA’s SPS
agreement is considered to have provided the blueprint for URAA’s SPS agreement.
Regarding trade in agricultural products, the Office of the U.S. Trade Representative (USITC)
asserts that USMCA would build upon NAFTA to make “important improvements in the
agreement to enable food and agriculture to trade more fairly, and to expand exports of American
agricultural products.”8
For USMCA to enter into force, Congress would need to ratify the agreement. It must also be
ratified by Canada and Mexico. The timeline for congressional approval of USMCA would likely
occur under the Trade Promotion Authority (TPA) timeline established under the Bipartisan
Congressional Trade Priorities and Accountability Act of 2015 (P.L. 114-26).9 At various times,
President Trump has stated that he intends to withdraw from NAFTA.10 Some observers have
suggested that delays in congressional action on USMCA could make it harder for Canada to
consider USMCA approval this year because of upcoming parliamentary elections in October
2019.11
Provisions of USMCA
USMCA seeks to expand upon the agricultural provisions of NAFTA by further reducing market
access barriers and strengthening provisions to facilitate trade in North America. An important
change in USMCA compared to NAFTA is that the United States agreement with Canada would
expand TRQs for imports of U.S. agricultural products into Canada. Other important changes
from NAFTA include the agreement between the three countries—Canada, Mexico, and the
United States—to further harmonize trade in products of agricultural biotechnology and apply the

6 Sugar trade between the United States and Mexico is governed by antidumping duty and countervailing duty
suspension agreements that imposed several limitations on this trade beginning in December 2014 and subsequently
revised in June 2017. See CRS In Focus IF10693, Amended Sugar Agreements Recast U.S.-Mexico Trade, by Mark A.
McMinimy.
7 For more information, see CRS Report R44875, The North American Free Trade Agreement (NAFTA) and U.S.
Agriculture, by Renée Johnson.
8 Office of the U.S. Trade Representative, “United States-Mexico-Canada Trade Fact Sheet: Strengthening North
American Trade in Agriculture,” October 2018, https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/
october/united-states%E2%80%93mexico%E2%80%93canada-trade-fa-2
9 See CRS Report R43491, Trade Promotion Authority (TPA): Frequently Asked Questions, by Ian F. Fergusson and
Christopher M. Davis; and CRS Report RL33743, Trade Promotion Authority (TPA) and the Role of Congress in Trade
Policy, by Ian F. Fergusson.
10 For example, Andrew Restuccia et al., “Trump Says He Will Withdraw from NAFTA, Pressuring Congress to
Approve New Trade Deal,” Politico, December 2, 2018.
11 World Trade Online, “Analysts Flag Shutdown, Election, 232 Concerns as Possible Roadblocks to USMCA
Approval,” February 20, 2019.
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same health, safety, and marketing standards to agricultural and food imports from USMCA
partners as for domestic products.
Expansion of Market Access Provisions
As agreed upon by the leaders of the United States, Canada, and Mexico, all food and agricultural
products that have zero tariffs under NAFTA would remain at zero under USMCA. Under
USMCA, agricultural products exempted from tariff elimination under the agreement signed
between the United States and Canada would be phased out for further market liberalization.
Canada currently employs a supply management regime that includes TRQs on imports of dairy
and poultry under its NAFTA and World Trade Organization (WTO) market access commitments.
Under NAFTA, U.S. dairy has access into the Canadian market under Canada’s WTO
commitment provisions. For poultry, NAFTA TRQs were established in accordance with the
original CUSTA provisions as a percentage of Canada’s domestic production.12 When Canada
joined the WTO in 1995, it committed to provide poultry market access at the level that is the
greater of its commitment under the WTO or under NAFTA.13 For chicken meat, the NAFTA
TRQ, set at 7.5% of the previous year’s domestic production, is higher than the WTO TRQ set at
39,844 metric tons.14 Canada’s chicken meat NAFTA TRQ was 90,100 metric tons in 2018, and
the estimate is 95,000 metric tons for 2019.15
Both the poultry and dairy TRQs under NAFTA are global rather than specific to U.S. imports.
The WTO dairy TRQs often have specific allocations for individual countries. For example, the
bulk of Canada’s WTO cheese quota is allocated to the European Union (EU), and the entire
WTO powdered buttermilk TRQ is allocated to New Zealand.16 Overall, Canada’s TRQs appear
to have restricted imports of dairy, poultry, and egg products, as the imported volumes for these
products have regularly equaled or exceeded their set quota limits.17
Under USMCA, Canada agreed to increase market access specifically to U.S. exporters of dairy
products via new TRQs that are separate from Canada’s existing WTO commitments. These
additional TRQs apply only to the United States. For chicken meat and eggs, the USMCA
replaces the NAFTA commitment with U.S.-specific TRQs. For turkey and broiler hatching eggs
and chicks, Canada’s NAFTA commitment would be replaced with a minimum access
commitment under USMCA, which is not specific to U.S. imports but applies to imports from all
origins. While USMCA would expand TRQs for U.S. exports, U.S. over-quota exports would still
face the steep tariffs that currently exist under Canada’s WTO commitment.18

12 Canada-United States Free Trade Agreement, Article 706, http://www.worldtradelaw.net/nafta/Cusfta.pdf.download.
13 Agriculture and Agri-Food Canada, “Canada’s Poultry Import Regime,” http://www.agr.gc.ca/eng/industry-markets-
and-trade/canadian-agri-food-sector-intelligence/poultry-and-eggs/poultry-and-egg-market-information/imports-and-
exports/canada-s-poultry-import-regime/?id=1384971854404 .
14 Canada-United States Free Trade Agreement, Article 706; Agriculture and Agri-Food Canada, “Canada’s Poultry
Import Regime.”
15 USDA, “Canada, Poultry and Products,” Annual GAIN Report CA18050, August 15, 2018.
16 WTO, “Tariff Analysis Online,” http://tao.wto.org/report/TariffQuotas.aspx.
17 Richard Barichello, “A Review of Tariff Rate Quota Administration in Canadian Agriculture,” Agricultural and
Resource Economics Review, vol. 29, no. 1 (April 2000), pp. 103-114; personal communication with R. Barichello,
March 18, 2019; WTO, “Notification-Canada-Tariff Quotas,” G/AG/N/CAN/128; Anastasie Hacault, “The Impact of
Market Access Reforms on the Canadian Dairy Industry,” thesis submitted to the University of Manitoba, 2011,
http://www.cdc-ccl.gc.ca/CDC/userfiles/file/Hacault%20Thesis.pdf.
18 USDA, “Canada, Poultry and Products.”
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The United States, in turn, agreed to improve access to Canadian dairy products, sugar, peanuts,
and cotton. The United States would increase TRQs for Canadian dairy, sugar, and sweetened
products. Tariffs on cotton and peanut imports into the United States from Canada would be
phased out and eliminated five years after the agreement would take effect.
As for U.S.-Mexico trade in agricultural products, under NAFTA, Mexico eliminated all the
tariffs and quotas that formerly governed agricultural imports from the United States, and the
proposed USMCA provides for no further market access changes for imports by Mexico of U.S.
agricultural products.
The proposed changes in the market access regime for U.S. agricultural exports to Canada under
USMCA are summarized in Table 2. Canada’s import restrictions on U.S. dairy products was a
high-profile issue for the United States in the USMCA negotiations, so it is noteworthy that under
USMCA, Canada agreed to reduce certain barriers to U.S. dairy exports, a key demand of U.S.
dairy groups. For one, Canada would make changes to its milk pricing system that sets low prices
for Canadian skim milk solids, which is believed to have undercut U.S. exports. Six months after
USMCA goes into effect, Canada would eliminate its Class 7 milk price (which includes skim
milk solids and is designated as Class 6 in Ontario) and would set its price for skim milk solids
based on a formula that takes into account the U.S. nonfat dry milk price. In the future, the United
States and Canada would notify each other if either introduces a new milk class price or changes
an existing price for a class of milk products.
Under USMCA, Canada would maintain its dairy supply management system, but the TRQs
would be increased each year for U.S. exports of milk, cheese, cream, skim milk powder,
condensed milk, yogurt, and several other dairy categories. While existing in-quota tariffs for
U.S. dairy exports to Canada are mostly zero, the over-quota rates can be as high as 200-300%.19
USMCA includes provisions on transparency for the implementation of TRQs, such as providing
advance notice of changes to the quotas and making public the details of quota utilization rates so
that exporters could monitor the extent to which the quotas are filled.
While WTO TRQs are available to U.S. dairy product exporters under the current NAFTA
provisions, the new TRQs proposed by Canada under USMCA would expand the access that U.S.
dairy products would have into Canada. Large portions of Canada’s WTO TRQs are allocated to
other countries, such as cheese to the EU and powdered buttermilk to New Zealand. Thus,
USMCA TRQs would open additional market opportunities for U.S. dairy exports to Canada. For
example, the 64,500 metric ton fluid milk TRQ currently provided under NAFTA is available
only for cross-border shoppers, but USMCA would allow up to 85% of the proposed new fluid
milk TRQ, which would reach 50,000 metric tons by year 6, to U.S. commercial dairy processors.
In response to another concern raised by the U.S. dairy industry, Canada agreed to cap its global
exports of skim milk powder and milk protein concentrates and to provide information regarding
these volumes to the United States. USMCA includes a requirement that the United States and
Canada meet five years after the implementation of the agreement—and every two years after
that—to determine whether to modify the dairy provisions of the agreement.
Under USMCA, Canada has proposed to replace its NAFTA commitments for poultry and eggs
with new TRQs. Under USMCA, the duty-free quota for chicken meat would start at 47,000

19 USDA, “Canada: Dairy and Products,” Annual GAIN Report CA18057, October 25, 2018.
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Table 2. Proposed Canadian Market Access for U.S. Agricultural Products Under
USMCA
Tariff Rate Quotas

(TRQs)
Tariff Rate, %
NAFTA commitments continue: Tariffs eliminated for

0
almost all agricultural products under NAFTA
NAFTA liberalization exemption: Dairy and poultry imports
TRQs opened under
0 in-quota; WTO MFN
into Canada
WTO commitments
over-quota tariffs
Dairy, U.S.-specific TRQs, in addition to TRQs under WTO, proposed by Canada
Fluid milk TRQ begins at 8,333 MT and increases by 1% each year
50,000 MT by year 6,
0 in-quota; WTO MFN
for 13 years after year 6
56,905 MT by year 19
over-quota >200%
Skim milk powder TRQ begins at 1,250 MT and increases by 1%
7,500 MT by year 6
0 in-quota; WTO MFN
each year for 13 years after year 6
over-quota >200%
Cheese TRQ begins at 2,084 MT and increases by 1% each year
12,500 MT by year 6
0 in-quota; WTO MFN
for 13 years after year 6
over-quota >200%
Cream TRQ begins at 1,750 MT and increases by 1% each year
10,500 MT by year 6
0 in-quota; WTO MFN
for 13 years after year 6
over-quota >200%
Whey TRQ begins at 689 MT and increases by 1% each year
4, 135 MT by year 6
0 after year 10
after year 6, until year 10
Other dairy products (butter and cream powder, concentrated
15,365 MT by year 6
0 in-quota; WTO MFN
and condensed milk, yogurt and buttermilk, powdered
over quota >200%
buttermilk, ice cream, other dairy and margarine) begins at 2,561
Margarine, 0 after year 5
MT and increases by 1% each year for 13 years after year 6
Poultry Products, New TRQs proposed by Canada
Chicken meat, to increase by 1% each year for 10 years after
47,000 MT in year
0 in-quota; WTO MFN
year 6
one, reaching 57,000
over-quota >200%
MT by year 6
Turkey meat, TRQ increase restricted to ≤ 1,000 MT after
≥ 3.5% of Canada’s
0 in-quota; WTO MFN
year 10
previous year’s
over-quota >200%
domestic production
Eggs and products (eggs and egg-equivalent), to increase by 1%
1.67 mil ion dozen in
0 in-quota; WTO MFN
for 10 years after year 6
year one, reaching 10
over-quota >163%
mil ion dozen in year 6
Broiler hatching eggs and chick products
≥ 21.1% of Canada’s
0 in-quota, >200% over
domestic production
quota
for that year
Source: Agreement between the United States of America, the United Mexican States, and Canada Text, Signed
November 30, 2018; Canada-United States Free Trade Agreement, https://www.international.gc.ca/trade-
commerce/assets/pdfs/agreements-accords/cusfta-e.pdf; USDA GAIN Report CA0125, 2000,
https://apps.fas.usda.gov/gainfiles/200008/30677853.pdf. Poultry over-quota tariff rates are as stated under
Canada’s WTO tariff schedule, WT/TPR/S/112 - WTO Documents Online.
Notes: The TRQs for turkey meat and for broiler hatching eggs and chicks are USMCA minimum global commitment
level of anticipated current year’s production or the WTO commitment volume, whichever is greater. MT denotes
metric tons.

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metric tons on the agreement’s entry into force and would expand to 57,000 metric tons in year
six. It would then continue to increase by 1% per year for the next 10 years (Table 2). The United
States would also have access to Canada’s WTO chicken quota available to imports from all
origins of 39,844 metric tons.20
Under USMCA, Canada’s TRQ for imports of U.S. eggs would be phased in over six equal
installments, reaching 10 million dozen by year six and then increasing by 1% per year for the
next 10 years. The annual TRQ for turkey and broiler hatching eggs and chicks would be set by
formulas based on Canadian production (see Table 2). The TRQs for turkey and broiler-hatching
eggs and chicks are USMCA minimum global access commitments based on the greater of
Canada’s anticipated current year production or its WTO commitment volume.
Improved Agricultural Trading Regime
Under USMCA, several key provisions would further expand the Canadian and Mexican market
access to U.S. agricultural producers.21 With the exception of the wheat grading provision
between Canada and Mexico, the following provisions, which aim to improve the trading regime,
apply to all three countries:
 Wheat. Canada and the United States have agreed that they shall accord
“treatment no less favorable than it accords to like wheat of domestic origin with
respect to the assignment of quality grades.”22 Currently, U.S. wheat exports to
Canada are graded as feed wheat, which generally commands a lower price.
Under USMCA, U.S. wheat exports to Canada would receive the same treatment
and price as equivalent Canadian wheat if there is a predetermination that the
U.S. wheat variety is similar to a Canadian variety. Canada maintains a list of
registered wheat varieties, but the United States does not have a similar list. U.S.
wheat exporters would first need to have U.S. varieties approved and registered
in Canada before they would be able to benefit from this equivalency provision.
According to some stakeholders, this process can be onerous and take several
years.23
 Cotton. The addition of a specific textile and apparel chapter to the proposed
USMCA may support U.S. cotton production. The chapter promotes greater use
of North American–origin textile products such as sewing thread, pocketing,
narrow elastics, and coated fabrics for certain end items.
 Spirits, wine, beer, and other alcoholic beverages. Each country must treat the
distribution of another USMCA country’s spirits, wine, beer, and other alcoholic
beverages as it would its own products. The agreement also establishes new rules
governing the listing requirements for a product to be sold in a given country
with specific limits on cost markups of alcoholic beverages imported from
USMCA countries.
 SPS provisions. USMCA’s SPS chapter calls for greater transparency in SPS
rules and regulatory alignment among the three countries. It would establish a

20 Agreement between the United States of America, the United Mexican States, and Canada Text, Signed November
30, 2018, https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-
between.
21 Agreement between the United States of America, the United Mexican States, and Canada Text.
22 Agreement between the United States of America, the United Mexican States, and Canada Text.
23 William W Wilson, “Canada-U.S. Wheat and Barley Trade,” Agriculture and Agri-food Canada, March 30, 2012.
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new mechanism for technical consultations to resolve SPS issues. SPS provisions
provide for increasing transparency in the development and implementation of
SPS measures; advancing science-based decision making; improving processes
for certification, regionalization and equivalency determinations; conducting
systems-based audits; improving transparency for import checks; and promoting
greater cooperation to enhance compatibility of regulatory measures.
 Geographical indications (GIs). The United States, Canada, and Mexico agreed
to provide procedural safeguards for recognition of new GIs, which are place
names used to identify products that come from certain regions or locations.
USMCA would protect the GIs for food products that Canada and Mexico have
already agreed to in trade negotiations with the EU and would lay out
transparency and notification requirements for any new GIs that a country
proposes to recognize. The agreement also details a process for determining
whether a food name is common or is eligible to be protected as a GI.
In a side letter accompanying the agreement, Mexico confirmed a list of 33 terms
for cheese that would remain available as common names for U.S. cheese
producers to use in exporting cheeses to Mexico. The list includes some terms
that are protected as GIs by the EU, such as Edam, Gouda, and Brie.
USMCA provisions would protect certain U.S., Canadian, and Mexican spirits as
distinctive products. Under the proposed agreement, products labeled as Bourbon
Whiskey and Tennessee Whiskey must originate in the United States. Similar
protections would exist for Canadian Whiskey, while Tequila and Mezcal would
have to be produced in Mexico. In a side letter accompanying the agreement, the
United States and Mexico further agree to protect American Rye Whiskey,
Charanda, Sotol, and Bacanora.
 Protections for proprietary food formulas. USMCA signatories agree to
protect the confidentiality of proprietary formula information in the same manner
for domestic and imported products. The agreement would also limit such
information requirements to what is necessary to achieve legitimate objectives.
 Biotechnology. The agricultural chapter of USMCA lays out provisions for trade
in products created using agricultural biotechnology, an issue that was not
covered under NAFTA. USMCA provisions for biotechnology cover crops
produced with all biotechnology methods, including recombinant DNA and gene
editing. USMCA would establish a Working Group for Cooperation on
Agricultural Biotechnology to facilitate information exchange on policy and
trade-related matters associated with the products of agricultural biotechnology.
The agreement also outlines procedures to improve transparency in approving
and bringing to market agricultural biotech products. It further outlines
procedures for handling shipments containing a low-level presence of
unapproved products.
While USMCA addresses a number of issues that restrict U.S. agricultural exports to Mexico and
Canada, it does not include all of the changes sought by U.S. agricultural groups. For instance,
the agreement does not include changes to trade remedy laws to address imports of seasonal
produce as requested by Southeastern U.S. produce growers. It also does not address non-tariff
barriers to market access for U.S. fresh potatoes in Mexico24 and Canada. Canada’s Standard

24 For more information see CRS Report R44875, The North American Free Trade Agreement (NAFTA) and U.S.
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Container Law (part of the Fresh Fruits and Vegetable Regulations of the Canadian Agricultural
Products Act) prohibits the importation of U.S. fresh potatoes to Canada in bulk quantities (over
50 kilograms).25 Finally, the agreement does not address the removal of retaliatory tariffs on U.S.
agricultural exports imposed by Canada and Mexico in response to U.S. Section 232 tariffs on
steel and aluminum. Some U.S. agriculture stakeholders have expressed concern that the potential
benefits of implementing USMCA would be outweighed by the retaliatory tariffs imposed on
U.S. agricultural exports by Canada and Mexico.26
US Agricultural Trade with Canada and Mexico
Since 2002, Canada and Mexico have been two of the top three export markets for U.S.
agricultural products (competing with Japan until 2009, when China moved into the top three). In
recent years, the two countries have jointly accounted for about 40% of the total value of U.S.
agricultural exports. Intraregional trade in North America has increased substantially since the
implementation of CUSTA and NAFTA and in the wake of Mexico’s market-oriented agricultural
reforms, which started in the 1980s (Figure 1). The value of total U.S. agricultural product
exports to Canada and Mexico rose from under $7 billion at the start of CUSTA in FY1990 to
almost $10 billion at the start of NAFTA in FY1994 and peaked at $41 billion in FY2014. The
lower level of exports since FY2014 is partly due to a drought-related decline in livestock
production in parts of the United States; increased Canadian production of corn, rapeseed, and
soybeans; increased use of U.S. corn as ethanol feedstock; growth in U.S. export markets outside
of NAFTA; and increased competition from outside of NAFTA.27 Since mid-2018, U.S. exports
of certain products have been adversely affected by the imposition of retaliatory tariffs by Canada
and Mexico in response to the Trump Administration’s application of a 25% tariff on all U.S.
steel imports and a 10% tariff on all U.S. aluminum imports under Section 232 of the Trade
Expansion Act of 1962.28
Similar to the growth in U.S. agricultural exports, U.S. imports of agriculture and related products
from Canada and Mexico grew from about $6 billion in FY1990 to $8 billion in FY1994, and
U.S. agricultural exports continued to increase after NAFTA came into force on January 1, 1994,
reaching $48 billion in FY2018. For FY2019, USDA projects that total U.S. agricultural exports
to Canada and Mexico will to decline to $41.2 billion, while U.S. imports from those countries
are projected at $49.6 billion.29

Agriculture, by Renée Johnson.
25 National Potato Council, “2019 National Trade Estimate Report on Foreign Trade Barriers,” https://spudman.com/
wp-content/uploads/2018/10/National_Potato_Council_-_2019_National_Trade_Estimate_Report_-_FINAL.pdf.
26 Food Business News, “Ag and Business Groups Urge Tying Loose Ends in Trade,” February 5, 2019,
https://www.foodbusinessnews.net/articles/13264-ag-and-business-groups-urge-tying-loose-ends-in-trade.
27 Zahniser et al., NAFTA at 20.
28 For more information see CRS Report R45249, Section 232 Investigations: Overview and Issues for Congress,
coordinated by Rachel F. Fefer; and CRS Report R45448, Profiles and Effects of Retaliatory Tariffs on U.S.
Agricultural Exports, by Jenny Hopkinson.
29 USDA, FAS GATS data, accessed March 5, 2019.
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Figure 1. U.S. Agriculture Exports to Canada and Mexico
Bil ions U.S. dol ars

Source: U.S. Census Bureau Trade Data, BICO-HS10, from fas.usda.gov/gats, accessed March 5, 2019.
Notes: Net trade = U.S. exports of agricultural products to Canada and Mexico minus U.S. imports of
agricultural products from those countries. Data are not adjusted for inflation.
U.S. Agricultural Exports to Canada and Mexico
Table 3 presents U.S. agricultural exports to Canada for selected years since 1990, the year after
the implementation of CUSTA. The other years in the table include 1995 (the year following the
start of NAFTA), 2009 (the year following the full implementation of NAFTA), and the last three
years with complete fiscal year data: 2016, 2017, and 2018.
U.S. agricultural exports to Canada averaged over $20 billion between FY2016 and FY2018
period (Table 3) and accounted for 14% of the total value of U.S. agriculture exports in FY2018.
While the overall value of U.S. agricultural exports to Canada has increased under NAFTA, U.S.
exports of consumer-ready food products registered the greatest increase, accounting for almost
80% of the value of all U.S. agricultural exports to Canada in FY2018. Canada accounted for
24% of the value of total U.S. consumer-ready food product exports to all destinations in
FY2018.
In FY2018, Canada accounted for 72% of the total value of U.S. fresh vegetable exports to all
destinations, 54% of non-alcoholic beverage exports to all destinations, 51% of snack food
exports to all destinations, 33% of total exports of fresh fruit, 33% of live animal exports, and
26% of total U.S. wine and beer exports to all destinations. Canada is also an important market
for bulk agricultural commodities, and Canadian imports of U.S. corn, soybeans, rice, pulses, and
wheat have increased since the implementation of NAFTA.

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Table 3. Major U.S. Agriculture Exports to Canada
Millions U.S. dollars, selected October 1-September 30 fiscal years
% Share
of Total
U.S. Ag
Exports,
1990
1995
2009
2016
2017
2018
FY2018a

Total agriculture
3,730
5,895
15,541
20,392
20,442
20,569
14
Total consumer oriented
2,565
4,361
11,835
16,374
16,291
16,127
24
Prepared food
126
487
1,355
1,904
1,891
1,876
31
Fresh vegetables
463
755
1,472
1,868
1,850
1,834
72
Fresh fruit
520
578
1,353
1,639
1,594
1,555
33
Snack foods
147
337
1,042
1,333
1,346
1,360
51
Tree nuts
59
82
256
596
639
674
8
Pork and pork products
26
49
521
782
797
763
12
Dairy products
29
67
329
589
672
627
11
Beef and beef products
270
379
629
765
789
768
9
Poultry meat and products
111
165
433
527
468
428
10
Eggs and products
26
32
70
119
92
120
20
Wine and beer
47
79
334
589
593
588
26
Non-alcoholic beverages
74
197
757
1,178
1,093
1,078
54
Corn
69
115
300
153
107
263
2
Soybeans
63
17
121
99
134
163
1
Rice
45
62
177
149
148
165
10
Wheat
0
0
12
15
19
20
0
Pulses
8
6
41
70
139
79
13
Live animals
73
128
92
114
176
280
33
Sugar and sweeteners
126
129
252
418
412
389
27
Distillers grains
1
2
117
95
109
121
5
Source: US Census Bureau Trade Data, BICO-HS10, accessed from fas.usda.gov/gats March 5, 2019.
Notes: Data are not adjusted for inflation. As defined by USDA, consumer-oriented products includes meats, fruit,
vegetables, processed food products, beverages, and pet food.
a. “% share” reflect the Canadian market share of total global U.S. exports in each category.
Table 4 provides a summary of key U.S. agricultural exports to Mexico for selected years since
FY1990. Total U.S. agricultural exports to Mexico grew from $2.7 billion in FY1990 to $3.7
billion in FY1995 after NAFTA came into force, reaching $18.8 billion in FY2018. Grains and
meats account for the largest share of exports, but growth has been strong among most products
including dairy, prepared food, fruit, tree nuts, sugars and sweeteners, wine and beer, and
distillers dry grains.
Between FY2016 and FY2018, U.S. agricultural exports to Mexico averaged over $18 billion,
accounting for 13% of the total value of U.S. agricultural exports to all destinations in FY2018
(Table 4). Consumer-ready products as a group account for a significant share of U.S. exports to
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Mexico at 13% of the total value of U.S. agricultural exports in FY2018. Mexico is also a major
U.S. export market for a number of bulk agricultural commodities, meat, and dairy products. In
FY2018, Mexico accounted for 25% of the total value of U.S. corn exports to all destinations,
24% of the total value of U.S. dairy exports, 22% each of the total value of U.S. pork and poultry
exports, 12% of the total value of U.S. wheat exports, and 8% of the total value of U.S. soybeans
exports to all destinations.
Table 4. Major U.S. Agriculture Exports to Mexico
Millions U.S. dollars, selected October 1-September 30 fiscal years
% Share
of Total
US Ag
Exports,
1990
1995
2009
2016
2017
2018
FY2018a

Agricultural products
2,671
3,720
13,325
17,618
18,608
18,845
13
Total consumer oriented
553
1,156
5,135
8,073
8,326
8,590
13
Fresh vegetables
11
30
145
111
110
148
6
Fresh fruit
31
89
361
510
543
616
13
Snack foods
27
40
181
293
292
306
12
Tree nuts
10
20
144
265
251
358
4
Pork and pork products
71
104
719
1,283
1,521
1,421
22
Dairy products
75
130
657
1,186
1,350
1,346
24
Beef and beef products
102
164
933
1,021
969
1,036
13
Poultry meat and products
50
183
574
948
923
950
22
Eggs and products
8
15
30
173
172
169
28
Wine and beer
10
17
100
185
186
189
8
Non-alcoholic beverages
6
40
77
131
127
123
6
Corn
528
355
1,586
2,541
2,588
2,835
25
Soybeans
217
413
1,362
1,366
1,607
1,667
8
Wheat
46
116
595
528
923
619
12
Cotton
39
186
390
334
401
372
6
Rice
62
73
346
258
289
261
16
Live animals
85
66
77
113
135
119
14
Sugar and sweeteners
92
58
301
614
623
697
48
Distillers grains
0
3
252
357
361
422
18
Source: U.S. Census Bureau Trade Data, BICO-HS10, accessed from fas.usda.gov/gats 5 March 2019.
Notes: Data are not adjusted for inflation. As defined by USDA, consumer-oriented products includes meats, fruit,
vegetables, processed food products, beverages, and pet food.
a. “% Share” reflect the Mexican market share of total global U.S. exports in each category.
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U.S. Imports from Canada and Mexico
U.S. agricultural imports from Canada and Mexico have increased in value from $26 billion in
FY2009—the first full year since the complete market liberalization under NAFTA in 2008—to
over $48 billion in FY2018 (Table 5).
Table 5. Major U.S. Agriculture Imports from Canada and Mexico
Millions U.S. dollars, selected October 1-September 30 fiscal years
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018

From Canada
Total agriculture
15,359
15,691 17,953
19,995
21,566
22,859
22,400
21,433
21,983
22,985
Snack foods
2,314
2,634
2,841
3,029
3,134
3,381
3,675
3,909
4,133
4,396
Red meats
1,481
1,740
1,780
1,840
1,723
2,207
2,373
2,212
2,281
2,288
Processed fruit and
1,111
1,069
1,183
1,309
1,417
1,383
1,412
1,433
1,491
1,581
vegetables
Fresh vegetables
869
970
1,067
1,021
1,160
1,225
1,182
1,306
1,364
1,503
Live animals
1,428
1,490
1,281
1,388
1,707
2,008
2,177
1,536
1,303
1,225
Other vegetable oils
1,100
1,053
1,887
2,019
1,755
1,687
1,602
1,679
1,970
1,874
Wheat
724
501
500
757
996
1,078
745
459
577
458
Coarse grains
571
401
546
700
968
725
586
556
480
454
Roasted, instant coffee
159
233
361
417
396
394
410
476
517
392
Nursery products
253
277
285
288
289
314
333
347
367
344
Feeds and fodders
202
207
252
328
379
359
331
320
297
303
Planting seeds
186
146
183
247
306
292
219
250
253
274
From Mexico
Total agriculture
11,259
13,003 15,439
16,283
17,223
18,884
20,687
22,515
24,079
25,668
Other fresh fruit
1,892
2,235
2,322
2,679
2,965
3,615
4,134
4,771
5,818
5,862
Fresh vegetables
2,786
3,507
3,904
4,063
4,448
4,565
4,773
5,617
5,253
5,804
Wine and beer
1,572
1,581
1,679
1,834
1,826
2,385
2,629
3,047
3,264
3,562
Snack foods
994
1,218
1,384
1,489
1,547
1,540
1,657
1,924
2,113
2,156
Processed fruit and veg
809
890
1,054
1,144
1,193
1,257
1,428
1,493
1,532
1,700
Red meats
114
201
322
485
586
749
1,064
1,063
1,085
1,199
Other consumer
741
850
979
954
999
1,026
1,037
1,052
1,055
1,144
oriented
Live animals
352
464
626
739
508
645
973
632
653
807
Tree nuts
157
220
284
336
268
333
426
513
671
705
Fruit and vegetable
166
189
227
189
239
261
296
318
475
431
juices
Bananas and plantains
46
61
63
87
120
117
132
127
160
195
Roasted, instant coffee
100
135
144
135
168
149
155
128
124
131
Source: U.S. Census Bureau Trade Data accessed from fas.usda.gov/gats March 5, 2019.
Notes: Data are not adjusted for inflation.
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Major U.S. imports from Canada include snack foods, meats, and processed fruit and vegetable
products. U.S. purchases of hogs and cattle from Canada had increased since NAFTA began, but
these imports have declined since FY2016. North American market dynamics and the prevailing
hog cycle dynamics in the NAFTA countries have affected live animal trade patterns in recent
years. Similarly, U.S. coarse grain imports from Canada have also declined in recent years, likely
the result of larger U.S. feed grain supplies. U.S. imports from Mexico mostly consist of fresh
fruit and vegetables, alcoholic beverages, snack foods, and processed fruit and vegetable
products.
Economic Effects of NAFTA versus USMCA
Many studies have assessed the effects of NAFTA on agriculture and the possible effects if
NAFTA were to be terminated. It is difficult to isolate the effects of NAFTA from the market
liberalization begun under CUSTA and from Mexico’s unilateral trade liberalization measures in
the 1980s and early 1990s, which included joining the General Agreement on Tariffs and Trade in
1986.30 Nevertheless, NAFTA is credited with facilitating trade in North America by reducing
tariffs and other market access barriers and by providing a stable and improved trading
environment in the region.31 Studies conducted by USDA indicate that U.S. agricultural exports to
Canada and Mexico have been higher than they would have been in the absence of NAFTA. One
such study concluded that NAFTA particularly expanded trade in those commodities that
underwent the most significant reductions in tariff and non-tariff barriers, including U.S. exports
to Canada of wheat products, beef and veal, and cotton and U.S. exports to Mexico of rice, cattle
and calves, nonfat dry milk, cotton, processed potatoes, apples, and pears.32
An October 2018 study commissioned by the Farm Foundation examines the potential economic
benefits associated with (1) USMCA compared with the provisions provided under NAFTA, (2)
USMCA in an environment with prevailing retaliatory tariffs on U.S. agricultural products in
response to U.S. tariff increases on imports of steel and aluminum, and (3) the effect of a
complete U.S. withdrawal from USMCA/NAFTA.33 The methodology used by the study assumes
that each of the three trade policy scenarios would need to remain in place for at least three to five
years or until the market equilibrium stabilizes following the initial policy shock. Thus, the
estimated effects from the study can be considered as the long-run impacts. The study considers
only proposed changes under USMCA to market access for U.S. agricultural exports to Canada,
such as changes in TRQs and tariff rates. It does not consider other changes proposed for
agriculture or for other sectors such as manufacturing and automobiles. The study’s conclusions
under these three scenarios follow.
1. Comparing USMCA to NAFTA, the study estimates that USMCA would
generate a net increase in annual U.S. agricultural exports to Canada of $450
million—about 1% of current U.S. exports under NAFTA. This estimated
increase would reflect increases in exports of dairy products (+$280 million) and

30 For more information see CRS Report R42965, The North American Free Trade Agreement (NAFTA), by M.
Angeles Villarreal and Ian F. Fergusson.
31 For more information see CRS Report R44875, The North American Free Trade Agreement (NAFTA) and U.S.
Agriculture, by Renée Johnson.
32 Zahniser et al., NAFTA at 20.
33 Maksym Chepelie et al., “How Differing Trade Policies May Impact U.S. Agriculture: The Potential Economic
Impacts of TPP, USMCA, and NAFTA,” GTAP Working Paper No. 84, commissioned by the Farm Foundation,
October 2018, https://www.gtap.agecon.purdue.edu/resources/working_papers.asp.
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meat (+$210 million), which would be partially offset by a decline in exports of
other agricultural products (-$40 million).
2. Under the scenario where USMCA would enter into force but the retaliatory
tariffs imposed by Canada and Mexico on U.S. agricultural exports would remain
in place, the study projects U.S. agricultural export losses from the retaliatory
tariffs of $1.8 billion annually, which would more than offset the projected gains
of $450 million from USMCA ratification.
3. Under the scenario of a U.S. withdrawal from NAFTA without USMCA
ratification, tariffs on U.S. exports to Canada and Mexico would be expected to
return to the higher WTO most-favored-nation (MFN) rates, the highest level of
applied tariffs rates under WTO commitments. In this circumstance, the study
finds that U.S. agricultural and food exports to Canada and Mexico would
decline by about $12 billion, or 30% of the value of U.S. agricultural exports to
these markets in FY2018. This loss is expected to be partially offset by an
increase of $2.6 billion in U.S. exports to other countries for a net loss in export
revenues of $9.4 billion. A loss of this order would represent a decline of 24%
compared with the total value of U.S. agricultural exports to these countries in
FY2018.
To date, similar studies assessing the effect of USMCA on U.S. agriculture as a whole are not
available.
U.S. Agricultural Stakeholders on USMCA
Individual commodity groups have stated that they expect to benefit from market access gains.
For example, the National Turkey Federation stated that USMCA would expand market access
resulting in a 29% increase in U.S. turkey exports to Canada.34 A broad coalition of U.S.
agricultural stakeholders is advocating for USMCA’s approval,35 contending that the proposed
agreement would further expand market access for U.S. agriculture. Most leading agriculture
commodity groups have expressed their support for USMCA.36 The U.S. wheat industry states
that although challenges remain in further opening commerce for U.S. wheat farmers near the
border with Canada, USMCA retains tariff-free access to imported U.S wheat for long-time flour
milling customers in Mexico.37 The American Farm Bureau Federation expressed satisfaction that
the USMCA not only locks in market opportunities previously developed but also builds on those
trade relationships in several key areas.38
On the other hand, other farm sector stakeholders, such as the National Farmers Union and the
Institute for Agriculture and Trade Policy, have expressed concern that the proposed agreement

34 Meat Import Council of America, “What USMCA Trade Pact Means to U.S./Canada Poultry Trade,” October 3,
2018, http://www.micausa.org/usmca-trade-pact-means-u-s-canada-poultry-trade/.
35 Inside U.S. Trade, “More Than 200 Companies, Associations Form the ‘USMCA Coalition’ to Push the Deal’s
Passage,” February 26, 2019.
36 American Soybean Association, “Leading Agriculture Organizations Endorse USMCA,” https://soygrowers.com/
news-releases/leading-agriculture-organizations-endorse-usmca/, March 1, 2019.
37 National Association of Wheat Growers and U.S. Wheat Associates, “Joint Statement—NAWG and U.S. Wheat
Associates Welcome Official Signing of USCMA, Encourage Repeat with Japan,” November 30, 2018,
https://www.uswheat.org/joint-statement-nawg-and-u-s-wheat-associates-welcome-official-signing-of-uscma-
encourage-repeat-with-japan/.
38 American Farm Bureau Federation, “USMCA,” https://www.fb.org/issues/trade/usmca/.
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does not go far enough to institute a fair trade framework that benefits family farmers and
ranchers.39
Some agricultural market observers question whether the benefits to U.S. agriculture of USMCA
over NAFTA will be more than incremental.40 Critics also point out that most U.S. agricultural
exports currently enjoy zero tariffs under NAFTA and that the main market access gain under
USMCA is through limited quota increases. A researcher for the International Food Policy
Research Institute recently concluded that farm production costs would be expected to increase
because of domestic content provisions in the agreement in tandem with the new U.S. tariffs on
steel and aluminum imports.41
Upon signing of the USMCA on November 30, 2018, President Trump stated, “This new deal
will be the most modern, up-to-date, and balanced trade agreement in the history of our country,
with the most advanced protections for workers ever developed.”42 Regarding agriculture,
Secretary Perdue echoed the sentiments expressed by most of the agricultural commodity groups:
“The new USMCA makes important specific changes that are beneficial to our agricultural
producers. We have secured greater access to the Mexican and Canadian markets and lowered
barriers for many of our products. The deal eliminates Canada’s unfair Class 6 and Class 7 milk
pricing schemes, opens additional access to U.S. dairy into Canada, and imposes new disciplines
on Canada’s supply management system. The agreement also preserves and expands critical
access for U.S. poultry and egg producers and addresses Canada’s discriminatory wheat grading
process to help U.S. wheat growers along the border become more competitive.”43
Outlook for Proposed USMCA
The proposed USMCA would have to be approved by Congress and ratified by Mexico and
Canada before entering into force.44 On August 31, 2018, pursuant to TPA, President Trump
provided Congress a 90-day notification of his intent to sign a free trade agreement with Canada
and Mexico. On January 29, 2019—60 days after an agreement was signed, and as required by
TPA—U.S. Trade Representative Robert Lighthizer submitted to Congress changes to existing
U.S. laws that would be needed to bring the United States into compliance with the proposed
USMCA. A report by the USITC on the possible economic impact of TPA is not expected to be

39 National Farmers Union, “USMCA Deal Falls Short of Fair Trade Framework for Family Farmers, NFU Says,” press
release, November 30, 2018, https://nfu.org/2018/11/30/usmca-deal-falls-short-of-fair-trade-framework-for-family-
farmers-nfu-says/; Institute for Agriculture and Trade Policy, “Family Farm Organizations from U.S., Canada Oppose
Signing of New NAFTA,” https://www.iatp.org/documents/family-farm-organizations-us-canada-oppose-signing-new-
nafta.
40 Joseph W. Glauber, The Emperor’s New NAFTA, FARE Share Newsletter, February 2019; Richard Barichello, The
CUSMA: Impacts on the Dairy Sector, FARE Share Newsletter, February 2019; Roger Noll and Robert E. Litan, “Extra
Milk Exports to Canada Under Trump’s Rebranded NAFTA Will Be a Drop in the Bucket,” Brookings Institution,
October 8, 2018.
41 Glauber, The Emperor’s New NAFTA; Jeffrey J. Schott, “For Mexico, Canada, and the United States, a Step
Backwards on Trade and Investment,” Peterson Institute for International Economics, October 2, 2018,
https://piie.com/blogs/trade-investment-policy-watch/mexico-canada-and-united-states-step-backwards-trade-and.
42 The White House, “The United States Signs a Stronger Trade Agreement with Mexico and Canada,” November 30,
2018, https://www.whitehouse.gov/briefings-statements/united-states-signs-stronger-trade-agreement-mexico-canada/.
43 USDA, “Statement of Secretary Perdue on Signing of USMCA,” press release, November 30, 2018,
https://www.usda.gov/media/press-releases/2018/11/30/statement-secretary-perdue-signing-usmca.
44 For more information, see CRS Report R44981, NAFTA Renegotiation and the Proposed United States-Mexico-
Canada Agreement (USMCA), by M. Angeles Villarreal and Ian F. Fergusson.
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completed until April 20, 2019, due to the 35-day government shutdown. The report has been
cited by some Members of Congress as key to their decisions on whether to support the
agreement.45
Some policymakers have stated that the path to ratifying USMCA by Congress is uncertain
partially because the three countries have yet to resolve disputes over tariffs on U.S. imports of
steel and aluminum, as well as retaliatory tariffs that Canada and Mexico have imposed on U.S.
agricultural products.46 The conclusion of the proposed USMCA did not resolve these tariff
disputes.
On January 30, 2019, Senator Chuck Grassley called on the Trump Administration to lift tariffs
on steel and aluminum imports from Canada and Mexico before Congress begins considering
legislation to implement the USMCA.47 Representatives of the U.S. business community,
agriculture interest groups, other congressional leaders, and Canadian and Mexican government
officials have also stated that these tariff issues must be resolved before the USMCA enters into
force.48 Some trade observers believe that delays in congressional action on USMCA could make
it harder for Canada to consider USMCA approval this year because of upcoming parliamentary
elections in October 2019.49

Author Information

Anita Regmi

Analyst in Agricultural Policy

45 World Trade Online, “ITC Says Release of USMCA Study to Be Delayed Due to Shutdown,” January 29, 2019.
46 Isabelle Hoagland, “Ways and Means Democrats Question USMCA Timing, Point to 232 Issues,” World Trade
Online, January 23, 2019; Isabelle Hoagland, “Brady: Congress Not Willing to Consider USMCA Until Steel,
Aluminum Issues Resolved,” World Trade Online, January 29, 2019; letter from group of 46 industries to The
Honorable Wilbur Ross and The Honorable Robert Lighthizer, January 23, 2019.
47 Reuters, “Senate Finance Chair Says Tariffs on Steel, Aluminum Should Go,” January 30, 2019,
https://www.reuters.com/article/us-usa-trade-grassley/senate-finance-chair-says-tariffs-on-steel-aluminum-should-go-
idUSKCN1PO25X.
48 World Trade Online, “Analysts Flag Shutdown, Election, 232 Concerns as Possible Roadblocks to USMCA
Approval,” February 20, 2019.
49 World Trade Online, “Analysts Flag Shutdown.”
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Disclaimer
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under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
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Congressional Research Service
R45661 · VERSION 1 · NEW
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