Agricultural Provisions of the
November 20, 2020
U.S.-Mexico-Canada Agreement
Anita Regmi
The United States-Mexico-Canada Agreement (USMCA), a comprehensive trade agreement
Specialist in Agricultural
among the three countries, entered into force on July 1, 2020. USMCA replaced the North
Policy
American Free Trade Agreement (NAFTA), which had been in effect since 1994. NAFTA

contributed to notable increases in trade in agricultural products within North America. Under
NAFTA, Mexico eliminated all tariffs and quotas that formerly governed agricultural imports

from the United States over a period of 14 years beginning in 1994. Canada and the United States
granted each other’s agricultural exports full market access, save for specific exceptions. The agricultural exceptions under
NAFTA included Canadian imports of U.S. dairy products, poultry, eggs, and margarine a nd U.S. imports of Canadian dairy
products, peanuts, peanut butter, cotton, sugar, and sugar-containing products. Under NAFTA, Canada has been the United
States’ top agricultural export market since 2002, and Mexico has in most years ranked second.
USMCA provides for no further market access changes for bilateral agricultural trade between the United States and Mexico.
USMCA expands market access for U.S. exports of dairy, most poultry products, and eggs to Canada. It is likely to lead to
lower U.S. access for chicken meat relative to projected access under NAFTA provisions. Likewise, USMCA expands access
for Canadian dairy, peanuts, peanut butter, cotton, sugar, and sugar-containing exports to the United States.
USMCA includes new provisions to govern trade in agricultural biotechnology products; limits the use of Geographical
Indications (GIs) to block exports of products labeled in certain ways; adds confidentiality protection for proprietary food
formulas, and requires USMCA countries to apply the same regulatory treatment to imported alcoholic beverages and wheat
as those that govern their domestic products. Some of these provisions could serve as models for U.S. proposals in other
future trade negotiations.
Canada and Mexico, the leading suppliers of and destinations for U.S. agricultural products, jointly accounted for 29% of all
U.S. agricultural exports and 40% of total imports in 2019. Consumer-oriented foods, such as meats, dairy, fruit, vegetables,
and prepared and packaged foods, have increasingly gained share of trade in the region. Since the implementation of
NAFTA, U.S. bilateral trade with Canada and Mexico has substantially increased, and according to several estimates, will
likely grow under USMCA. Studies indicate modest gains in regional trade under USMCA, with the greatest potential for
gains from provisions to modernize and integrate customs procedures to reduce trade costs and border inefficiencies. A study
indicates gains to be greater for Canada than for the other two countries, while another indicates possible losses for small
fruit and vegetable producers in the State of Georgia.
As it oversees the implementation of USMCA, Congress may monitor Canada’s actions to expand market access for U.S.
dairy, poultry meat, and eggs. Congress may also examine progress in implementing the various nontariff provisions that the
three countries agreed to under the USMCA, particularly efforts to harmonize sanitary and phytosanitary rules and to
establish a regulatory framework to govern trade in products created with agricultural biotechnology.
USMCA has expanded access to the U.S. market for Canadian dairy, sugar, and products containing sugar, and Congress
may examine how this improved access to the U.S. market affects these sectors and the U.S. rural economy. It may also
evaluate the effects of supply-chain disruptions due to the Coronavirus Disease 2019 (COVID-19) pandemic and any impacts
on efforts toward greater integration of the North American market for agricultural products.
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Introduction
The United States-Mexico-Canada Agreement (USMCA), a comprehensive trade agreement
among the three countries, entered into force on July 1, 2020.1 USMCA replaced the North
American Free Trade Agreement (NAFTA), which had been in effect since 1994 (P.L. 103-182).
USMCA continues the liberalization of agricultural trade within North America, which has been
under way for more than three decades. It also addresses a number of trade-related issues that
NAFTA did not consider. This report provides a brief history of agricultural trade agreements
within North America, explores the changes made in the USMCA, and considers how the new
agreement is likely to affect the flow of trade in agricultural commodities and food products.
Agricultural Trade Liberalization in North America
The Canada-U.S. Free Trade Agreement (CUSTA), which went into effect on January 1, 1989,
began the process of agricultural trade liberalization within North America. The agreement
provided for the elimination of almost al tariffs on agricultural products traded between the two
countries over a 10-year period, although each country retained the right to impose temporary
duties on certain fresh fruits and vegetables to protect against import surges from the other
country. The agreement also exempted full liberalization of meat trade between the two countries,
and did not include provisions to prevent Canada from using discriminatory marketing and
pricing measures for U.S. wine and distil ed spirits. It barred the United States from imposing
import restrictions on Canadian products containing less than 10% sugar by weight and provided
for the elimination of certain Canadian grain transportation subsidies. Most U.S. and Canadian
nontariff barriers and agricultural support policies were unchanged by the agreement.2
NAFTA was structured as three separate agreements, one between Canada and the United States,
one between the United States and Mexico, and the third between Mexico and Canada. The U.S.-
Canada portion of NAFTA incorporated the agricultural provisions of CUSTA. NAFTA continued
to exempt certain products from market liberalization, including 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’s imports
of these products were limited by tariff-rate quotas (TRQs), which provided for a volume of
imports to enter with no tariff but assessed high tariffs on imports beyond the quota amount.
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
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 2008.3 Table 1 provides a chronology of measures to
liberalize agricultural trade within North America.

1 For more information, see CRS Report R44981, The United States-Mexico-Canada Agreement (USMCA), by M.
Angeles Villarreal and Ian F. Fergusson.
2 CRS Report 88-506, The Effect of the Canada-U.S. Free Trade Agreement on U.S. Industries, by Arlene Wilson and
Carl E. Behrens, July 22, 1988. T his document is available to congressional clients upon request.
3 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
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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
NAFTA nine-year transition period between Mexico and the United States completed.

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 the proposed USMCA.
April 2019
U.S. International Trade Commission submits report assessing potential economic
impacts of USMCA to the President and Congress.
January 29, 2020
USMCA implementing legislation becomes law (P.L. 116-113).
July 1, 2020
USMCA enters into force.
Source: Steven Zahniser and John Link, Effects of North American Free Trade Agreement on Agriculture and the Rural
Economy, WRS-02-1, U.S. Department of Agriculture (USDA), Economic Research Service (ERS), July 2002;
Henrich Brunke and Daniel A. Sumner, “Role of NAFTA in California Agriculture: A Brief Review,” AIC Issues
Brief, no. 21, University of California, February 2003; Steven Zahniser and Zachary Crago, NAFTA at 15: Building
on Free Trade, WRS-09-03, USDA, ERS, March 2009; and CRS Report R44981, The United States-Mexico-Canada
Agreement (USMCA), by M. Angeles Vil arreal and Ian F. Fergusson.

revised in June 2017. See CRS In Focus IF10693, Am ended Sugar Agreem ents Recast U.S.-Mexico Trade, by Mark A.
McMinimy.
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In addition to directly improving market access, NAFTA addressed other issues related to the
integration of the North American agricultural market. These included provisions on rules of
origin to exclude products original y shipped from other countries from benefiting from NAFTA
preferential treatment; the development, adoption, and enforcement of sanitary and phytosanitary
(SPS) regulations in the region; and a commitment by the United States and Mexico that when
either country applies marketing, grade, or quality standards to a domestic product destined for
processing, it wil provide no less favorable treatment for like products imported for processing. 4
Provisions of USMCA
USMCA expands upon the agricultural provisions of NAFTA by further reducing market access
barriers and strengthening provisions to facilitate trade in North America.
Expansion of Market Access Provisions
Al food and agricultural products that had zero tariffs under NAFTA remain at zero under
USMCA. Regarding U.S.-Mexico trade in agricultural products, under NAFTA, the two countries
eliminated al the tariffs and quotas that formerly governed agricultural imports, and USMCA
provides for no further market access changes for agricultural trade between the two countries.
Regarding trade between the United States and Canada, the two countries are providing greater
access to most products that faced restrictions under NAFTA. This includes Canada expanding its
access to imports of U.S. dairy products, poultry, eggs, and margarine and the United States
granting access to imports of Canadian dairy products, peanuts, peanut butter, cotton, sugar, and
sugar-containing products.
Expanded Access for U.S. Imports to Canada
Canada has historical y employed a supply management regime that included TRQs on imports of
dairy and poultry. Canada’s TRQs under NAFTA appear to have restricted imports of some dairy,
poultry, and egg products, as the imported volumes for some of these products regularly equaled
or exceeded their set quota limits.5 Under USMCA, Canada is changing its TRQs to expand
access for U.S. products. Table 2 summarizes the changes in the market access regime for U.S.
agricultural exports to Canada.
U.S. Dairy Market Access Under USMCA
Canada’s import restrictions on U.S. dairy products were 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. For one, Canada has agreed to make changes to its milk
pricing system, which has been accused of setting low prices for Canadian skim milk solids and
thereby undercutting U.S. exports. Effective January 1, 2021, Canada has agreed to eliminate its

4 For more information, see CRS Report R44875, The North American Free Trade Agreement (NAFTA) and U.S.
Agriculture, by Renée Johnson.
5 Richard Barichello, “A Review of T ariff Rate Quota Administration in Canadian Agriculture,” Agricultural and
Resource Econom ics Review, vol. 29, no. 1 (April 2000), pp. 103 -114; personal communication with Richard
Barichello, March 18, 2019; World T rade Organization (WT O), T ariff-Rate Quota notification by Canada,
G/AG/N/CAN/128, March 7, 2019; Anastasie Hacault, “T he Impact of Market Access Reforms on the Canadian Dairy
Industry,” thesis submitted to the University of Manitoba, 2011, at http://www.cdc-ccl.gc.ca/CDC/userfiles/file/
Hacault%20T hesis.pdf.
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Class 7 milk price (which includes skim milk solids and is designated as Class 6 in Ontario) and
wil henceforth set its price for skim milk solids based on a formula that takes into account the
U.S. nonfat dry milk price.6 In the future, the United States and Canada have agreed to notify
each other if either introduces a new milk class price or changes an existing price for a class of
milk products.
Canada has also converted its dairy TRQs under NAFTA, which were available to al World
Trade Organization (WTO) members, to U.S.-specific quotas. Under USMCA, Canada has agreed
to maintain its dairy supply management system, but the TRQs are to be increased each year for
U.S. exports of milk, cheese, cream, skim milk powder, condensed milk, yogurt, and several other
dairy categories (see Table 2). U.S. dairy exports to Canada is to continue to face zero in-quota
tariffs, as under NAFTA. Exports over set quota limits are to continue to face tariffs as high as
200% to 300%.7 While WTO TRQs are to remain available to U.S. dairy product exporters, the
16F
new TRQs under USMCA are to provide additional access to U.S. dairy products into Canada.
USMCA includes provisions on transparency for the implementation of TRQs. These include
requirements to provide advance notice of changes to the quotas and to make public the details of
quota utilization rates so that exporters are able to monitor the extent to which the quotas are
fil ed. USMCA also 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.
U.S. Poultry Market Access Under USMCA
Canada replaced its NAFTA market access commitments for U.S. poultry and eggs with new
USMCA TRQs. Imports of U.S. poultry products over set quota limits may face tariffs as high as
almost 400%.8 Under USMCA, Canada’s TRQ for imports of U.S. eggs is to be phased over six
F
equal instal ments, reaching 10 mil ion dozen by 2025 and then increasing by 1% per year for the
following 10 years. The annual TRQs for turkey and broiler hatching eggs and chicks are set by
formulas based on Canadian production (see Table 2).

For chicken meat, the duty-free quota under USMCA starts at 47,000 metric tons per year and
expands to 57,000 metric tons in 2025. It then is to continue to increase by 1% per year for the
next 10 years (Table 2). The United States also has access to Canada’s WTO chicken meat quota
of 39,844 metric tons that is available to imports from al origins. 9
17F

6 U.S. exports are for nonfat dry milk, defined by U.S. standards and regulations, while skim milk powder is defined by
the Codex Alim entarius, an international agreement on food standards. Nonfat dry milk has protein content
requirements and does not include food additives. T he Codex standard allows skim milk powder to have a lower
protein content than that required by the U.S. standard and can contain food additives. All U.S. nonfat dry milk meet
the Codex skim milk powder requirement but all skim milk powder may not meet the U.S. nonfat dry milk standard.
See Phil T ong, “Nonfat Dried Milk and Skim Milk Powder –All T he Same or Different?” ADPI Intelligence, vol. 5,
issue 1, American Dairy Products Institute, 2017.
7 WT O, “Canada T rade Policy Review: Report by T he Secretariat,” T able 3.5, WT /T PR/S/314/Rev.1, September 30,
2015, at https://docsonline.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT /T PR/S314R1.pdf&Open=True;
and USDA, FAS, “Canada: Dairy and Products,” Annual GAIN Report Number: CA18057 , October 25, 2018.
8 For poultry over-quota tariff rates, see WT O, “Canada T rade Policy Review: Report by T he Secretariat,” T able 3.6,
WT /T PR/S/314/Rev.1, September 30, 2015, at https://docsonline.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/
WT /T PR/S314R1.pdf&Open=True.
9 Office of the U.S. T rade Representative (UST R), Agreement Between the United States of America, the United
Mexican States, and Canada T ext, Signed November 30, 2018 , https://ustr.gov/trade-agreements/free-trade-agreements/
united-states-mexico-canada-agreement/agreement-between.
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Table 2. Canadian Market Access for U.S. Agricultural Imports Under USMCA
Tariff Rate Quotas

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

0
almost al agricultural products under NAFTA
NAFTA liberalization exemption: Dairy and poultry
TRQs opened under
0 in-quota; WTO
imports into Canada
WTO commitments
MFN over-quota
Dairy, U.S.-specific USMCA TRQs, in addition to TRQs under WTO
Fluid milk TRQ begins at 8,333 MT and increases by 1% each
50,000 MT by August
0 in-quota; WTO
year for 13 years after year 6
2024, 56,905 MT by
MFN over-quota
August 2036
Skim milk powder TRQ begins at 1,250 MT and increases by
7,500 MT by August
0 in-quota; WTO
1% each year for 13 years after year 6
2024
MFN over-quota
Cheese TRQ (50% is for industrial use) begins at 2,084 MT
12,500 MT by January
0 in-quota; WTO
and increases by 1% each year for 13 years after year 6
2025
MFN over-quota
Cream TRQ begins at 1,750 MT and increases by 1% each
10,500 MT by August
0 in-quota; WTO
year for 13 years after year 6
2024
MFN over-quota
Whey TRQ begins at 689 MT and increases by 1% each year
4,135 MT by August
0 after year August
after year 6, until year 10
2024
2028
Other dairy products (butter and cream powder,
15,365 MT by August
0 in-quota; WTO
concentrated and condensed milk, yogurt and buttermilk,
2024 for butter and
MFN over quota
powdered buttermilk, ice cream, natural milk constituents,
cream powder, and
Margarine, 0 starting
other dairy and margarine) begins at 2,561 MT and increases
January 2025 for the rest
January 2025
by 1% each year for 13 years after year 6
Poultry products, new USMCA TRQs
Chicken meat, to increase by 1% each year for 10 years after
47,000 MT in year one,
0 in-quota; WTO
year 6
reaching 57,000 MT by
MFN over-quota
January 2025
Turkey meat, after 2029, Canada may restrict TRQ size if it
≥ 3.5% of Canada’s
0 in-quota; WTO
exceeds 3.5% of that year’s production level by 1,000 MT
previous year’s domestic
MFN over-quota
production
Eggs and products (eggs and egg-equivalent), to increase by
1.67 mil ion dozen in year
0 in-quota; WTO
1% for 10 years after year 6
one, reaching 10 mil ion
MFN over-quota
dozen by January 2025
Broiler hatching eggs and chick products
≥ 21.1% of Canada’s
0 in-quota, WTO
domestic production for
MFN over-quota
that year
Source: Office of the U.S. Trade Representative (USTR), “Agreement Between the United States of America,
the United Mexican States, and Canada 7/1/20 Text,” accessed November 2020, at https://ustr.gov/trade-
agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between; and USDA
GAIN Report Number:CA0125, 2000, at https://apps.fas.usda.gov/gainfiles/200008/30677853.pdf.
Notes: The TRQs for turkey meat and broiler hatching eggs and chicks are based on anticipated current-year
production or World Trade Organization (WTO) commitment volume, whichever is greater. MT = metric tons,
MFN = Most Favored Nation. MFN tariffs are levied in a nondiscriminatory manner by WTO member countries
on al imports excepting imports from countries with a preferential trade agreement when a lower rate of tariff
may be applied.
The sum of the USMCA and WTO quotas is lower than the total quota that was available to U.S.
chicken meat under NAFTA (Figure 1), which was set at 7.5% of Canada’s estimated production
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level in the previous year. For example, the USMCA full-year quota for 2020 would have been
88,300 metric tons10 compared with an estimated quota of 99,630 metric tons under NAFTA. 11
18F
T
The Coronavirus Disease 2019 (COVID-19) pandemic has led to a reduction in Canada’s
production of chicken meat in 2020. This would have led to a reduction in the NAFTA quota for
2021 (estimated at 96,750 metric tons), but it does not affect the USMCA quota of 88,800 metric
tons.12
Figure 1. U.S. Chicken Meat Access To Canada Under NAFTA, USMCA and CPTPP
After Ful Implementation (Sixth Year) of USMCA in 2025
Thousand Metric Tons
Estimated U.S. Access under
140
NAFTA provisions
120
CPTPP-global TRQ
24.0
26.5
U.S. not a CPTPP member
100
80
USMCA
57.0
63.0 U.S.-specific
60
U.S. access
under USMCA
40
WTO-global
20
39.8
0
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035

Source: Canada’s Commitments under World Trade Organization (WTO), North American Free Trade
Agreement (NAFTA), and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). NAFTA’s
estimated quota is CRS calculation as a 7.5% of Canada’s previous year’s chicken meat production, which was
projected with an equation estimated using Canada’s chicken meat production from 2007 to 2019 from USDA’s
Production, Supply, and Demand database, at https://apps.fas.usda.gov/psdonline/app/index.html#/app/advQuery.
Note: TRQ = Tariff-rate quota.
Canada has also al ocated a global TRQ for chicken meat under the Comprehensive and
Progressive Trans-Pacific Partnership (CPTPP), which entered into force for Canada on
December 30, 2018.13 Given the geographic disadvantage of most CPTPP member countries,14

10 Note that from January-June 2020, Canada’s NAFT A T RQ was effective and USMCA T RQs became effective only
for July-December 2020. Given the two different import regimes, total T RQ available for U.S. chicken meat exports to
Canada in 2020 was 91,900 metric tons—less than the 99,630 metric tons estimated for NAFT A. See, USDA, FAS,
“Canada: Poultry and Products Annual,” GAIN Report Number: CA2020-0078, August 26, 2020.
11 T he 2020 quota is calculated as 7.5% of the 1,328,900 metric tons of chicken meat Canada produced in 2019. USDA,
FAS, “Canada: Poultry and Products Annual,” GAIN Report Number: CA2020-0078, August 26, 2020.
12 Ibid.
13 Government of Canada, “ About the Comprehensive and Progressive Agreement for T rans-Pacific Partnership,”
accessed October 2020, at https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/
agr-acc/cptpp-ptpgp/backgrounder-document_information.aspx?lang=eng#:~:text=
T he%20CPT PP%20entered%20into%20force,Vietnam%20on%20January%2014%2C%202019.
14 As of October 2020, the Comprehensive and Progressive Agreement for T rans-Pacific Partnership (CPTPP) has been
ratified by Australia, Canada, Japan, Mexico, New Zealand, and Vietnam. Other signatories to the CPT PP include
Brunei, Chile, Malaysia, Peru, and Singapore. Mexico and Peru are net importers of poultry products.
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these countries are unlikely to fil Canada’s CPTPP quota for chicken meat. The U.S. Department
of Agriculture (USDA) attaché in Canada reports that Chile could ship chicken meat to Canada
under the CPTPP TRQ, but Chile has not yet ratified the agreement and no trade has occurred
under this TRQ.15 If the CPTPP TRQ is added to the USMCA TRQ, market access for U.S.
chicken meat into Canada could possibly exceed the volume that would have been permitted
under NAFTA (Figure 1.)
Expanded Access for Canadian Imports to the United States
The United States, in turn, agreed to improve access for Canadian dairy products, sugar, peanuts,
peanut butter, and cotton. The United States agreed to increase TRQs for Canadian dairy, sugar,
and sugar-containing products (Table 3). The United States is phasing out the tariffs on cotton,
peanut, and peanut butter imports from Canada, and agreed to eliminate these tariffs on January 1,
2025.16
Canadian Dairy Product Access Under USMCA
Under USMCA, the United States is providing Canada-specific TRQs for dairy products (Table
3). In addition to these quotas, Canada may also have access to other existing dairy quotas that
the United States provides to al foreign suppliers under its WTO commitments.17 Canada-
specific access includes a set volume of imports that increase up to 2025, and then increase 1%
each year for 13 more years. The United States has expanded access for Canadian ice cream,
other creams, milk beverages, skim milk powder, butter, cream powder, cheese, whole milk
powder, dried yogurt, whey, other milk components, concentrated milk, and various other dairy
products (Table 3). Imports of Canadian dairy products within the quotas face zero duties, while
imports over the set quota volumes are to be levied duties that can exceed 100% for some
products.18
Canadian Sugar and Sugar-Containing Product Market Access Under USMCA
Under USMCA, the United States is providing access each year to 9,600 MT of refined sugar
processed wholly from Canadian sugar beets under a new Canada-specific TRQ. If the Secretary
of Agriculture makes a determination to increase the refined sugar TRQ under U.S. WTO
commitments, 20% of the additional WTO quota volume wil be reserved for Canadian sugar.19
The in-quota tariff for al sugar imports is zero, and the over-quota tariff can be close to 90% for
some products.20

15 USDA, FAS, “Canada: Poultry and Products Annual,” GAIN Report Number: CA2020-0078, August 26, 2020.
16 UST R, Agreement Between the United States of America, the United Mexican States, and Canada 7/1/20 T ext ,
National T reatment and Market Access For Goods, T ariff Schedule of the United States, General Notes, Chapter 2,
Annex 2-B-6, accessed October 2020, at https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-
canada-agreement/agreement -between.
17 Ibid., Appendix 2, T ariff Schedule of the United States – T ariff Rate Quotas.
18 World Integrated T rade Solution (WIT S), T RAINS Ad Valorem Equivalent data for 2018, accessed November 2020.
19 UST R, Agreement Between the United States of America, the United Mexican States, and Canada 7/1/20 T ext ,
Chapter 2, National T reatment and Market Access For Goods, T ariff Schedule of the United States, T ariff Rate Quotas,
T RQ-US9: Sugar, accessed October 2020, at https://ustr.gov/trade-agreements/free-trade-agreements/united-states-
mexico-canada-agreement/agreement -between.
20 WIT S, T RAINS Ad Valorem Equivalent data for 2018, accessed November 2020.
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Table 3. U.S. Market Access for Canadian Agricultural Products Under USMCA
Tariff Rate Quotas

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

0
almost al agricultural products under NAFTA
NAFTA liberalization exemption: Dairy, peanut, peanut
TRQs opened under
0 in-quota; WTO
butter, cotton, sugar and sugar-containing products into the
WTO commitments
MFN over-quota
United States
Peanut, Peanut Butter, and Cotton under USMCA: 6

0, starting January
annual tariff reductions
2025
Dairy, Canada-specific USMCA TRQs, in addition to TRQs under WTO
Cream, ice cream, and milk beverages, TRQ begins at 1,750
10,500 liters by January
0 in-quota; WTO
liters and increases by 1% each year for 13 years after year 6
2025
MFN over-quota
Skim milk powder, TRQ begins at 1,250 MT and increases by
7,500 MT by January
0 in-quota; WTO
1% each year for 13 years after year 6
2025
MFN over-quota
Butter, cream, and cream powder TRQ begins at 750 MT and
4,500 MT by January
0 in-quota; WTO
increases by 1% each year for 13 years after year 6
2025
MFN over-quota
Cheese TRQ begins at 2,083 MT and increases by 1% each
12,500 MT by January
0 in-quota; WTO
year for 13 years after year 6
2025
MFN over-quota
Whole milk powder TRQ begins at 115 MT and increases by
690 MT by January
0 in-quota; WTO
1% each year for 13 years after year 6
2025
MFN over-quota
Dried yogurt, sour cream, whey and other milk constituents
11,030 MT by January
0 in-quota; WTO
TRQ begins at 1,838 MT and increases by 1% each year for 13
2025
MFN over-quota
years after year 6
Concentrated milk TRQ begins at 230 MT and increases by 1%
1,380 MT by January
0 in-quota; WTO
each year for 13 years after year 6
2025
MFN over-quota
Other dairy products TRQ begins at 317 MT and increases by
1,900 MT by year
0 in-quota; WTO
1% each year for 13 years after year 6
January 2025
MFN over-quota
Sugar and sugar-containing product TRQs under USMCA
Refined sugar TRQ, Canada-specific, new under USMCA
9,600 MT
0 in-quota, WTO
MFN over-quota.
Refined sugar TRQ, al ocation of WTO quota
At least 10,300 MT
0 in-quota; WTO
MFN over-quota
Sugar-containing product TRQ, al ocation of WTO quota
At least 59,250 MT
0 in-quota; WTO
MFN over-quota
Source: Office of the U.S. Trade Representative (USTR), “Agreement between the United States of America,
the United Mexican States, and Canada 7/1/20 Text,” accessed October 2020, at https://ustr.gov/trade-
agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between.
Notes: MT = metric tons, WTO = World Trade Organization, MFN = Most Favored Nation. MFN tariffs are
levied in a nondiscriminatory manner by WTO member countries on al imports excepting imports from
countries with a preferential trade agreement when a lower rate of tariff may be applied.
The United States is further guaranteeing market access to Canadian sugar and sugar-containing
products by al ocating Canada-specific quotas within the TRQs the United States established per
its WTO commitments (see Table 3). The country-specific quotas thus al ocated to Canada are
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10,300 MT of refined sugar and 59,250 MT of sugar-containing products.21 Canada is to continue
to have access to the U.S. market beyond the set quota levels for sugar and products containing
sugar, as applicable under the WTO rights and commitments of the two countries. If in a given
year the U.S. WTO sugar quota is unfil ed, the Secretary of Agriculture may al ow additional
sugar from Canada to enter duty-free. Canadian sugar and sugar-containing product imports over
the set quota volume wil be levied the higher tariff rates paid by other WTO members.
Modifications to Agricultural Trading Regime
Under USMCA, several key provisions wil further expand Canadian and Mexican market access
to U.S. agricultural producers.22 With the exception of the wheat grading provision agreed
19F
between Canada and the United States, the following provisions apply to al three countries:
 Wheat. Canada and the United States agreed to accord the same treatment to
“like wheat of domestic origin with respect to the assignment of quality
grades.”23 Currently, U.S. wheat exports to Canada are graded as feed wheat,
which general y commands a lower price. Under USMCA, U.S. wheat exports to
Canada wil 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 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.24
 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 wil its own products. The agreement 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 cal s for greater transparency in SPS
rules and regulatory alignment among the three countries. It is to establish a 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

21 Ibid, Agreement on Agriculture, Chapter 3, Annex 3-A, Agricultural T rade Between Canada and the United States,
Article 3.A.5. Sugar and Sugar Containing Products.
22 UST R, Agreement Between the United States of America, the United Mexican States, and Canada 7/1/20 T ext ,
accessed October 2020, at https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-
agreement/agreement -between.
23 Ibid.
24 William W. Wilson, “Canada-U.S. Wheat and Barley T rade,” Agriculture and Agri-food Canada, March 30, 2012.
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systems-based audits; improving transparency for import checks; and promoting
greater cooperation to enhance compatibility of regulatory measures.
Geographical indications (GIs).25 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 provisions include guidelines to determine whether a term is a
common name or a protected GI, grounds for opposition and cancel ation of a GI,
and treatment of GIs under third-party agreements. USMCA protects GIs for food
products that Canada and Mexico have already agreed to in trade negotiations
with the EU and lays out transparency and notification requirements for any new
GIs that a country proposes to recognize.

In a side letter accompanying the agreement, Mexico confirmed a list of 33 terms
for cheese that is to 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 are to 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 are to exist in the United States and Mexico for Canadian Whiskey,
while Tequila and Mezcal wil 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 agreed to
protect the confidentiality of proprietary formula information in the same manner
for domestic and imported products. The agreement also is to 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 al biotechnology methods, including recombinant DNA and gene
editing. USMCA is to 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 al of the changes sought by U.S. agricultural groups. For example, it
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 nontariff barriers to
market access for U.S. fresh potatoes in Mexico26 and Canada. Canada’s Standard Container Law
22F

25 UST R, “Agreement Between the United States of America, the United Mexican States, and Canada” Legal T ext,
Intellectual Property Rights, Chapter 20, accessed October 2020, at
ttps://ustr.gov/sites/default/files/files/agreements/FT A/USMCA/T ext/20%20Intellectual%20Property%20Rights.pdf.
26 For more information, see CRS Report R44875, The North American Free Trade Agreement (NAFTA) and U.S.
Agriculture, by Renée Johnson.
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(part of the Fresh Fruits and Vegetable Regulations of the Canadian Agricultural Products Act)
prohibits the imports of U.S. fresh potatoes in quantities over 50 kilograms.27 USMCA also does
23F
not include provisions concerning trade in organic foods.28
U.S. Agricultural Trade with Canada and Mexico
Agricultural trade within North America has increased substantial y since the implementation of
CUSTA and NAFTA and in the wake of Mexico’s market-oriented agricultural reforms, which
started in the 1980s (Figure 2). U.S. imports from Canada and Mexico jointly increased in
nominal values from $6 bil ion at the start of CUSTA in 1990 to $8 bil ion at the start of NAFTA
in 1994, reaching $52 bil ion in 2019.
Likewise, the nominal value of total U.S. agricultural exports to Canada and Mexico rose from $7
bil ion at the start of CUSTA in 1990 to $10 bil ion at the start of NAFTA in 1994. It peaked at
$41 bil ion in 2014 and was $40 bil ion in 2019. The lower value of exports since 2014 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
countries outside of NAFTA.29
From July 2018 to May 2019, U.S. exports of certain products to Canada and Mexico declined
due to retaliatory tariffs imposed by these countries in response to the Trump Administration’s
application of a 25% tariff on U.S. steel imports and a 10% tariff on U.S. aluminum imports.30 To
facilitate the ratification of USMCA, the United States removed its tariffs on steel and aluminum
imports from Canada and Mexico in May 2019, and these countries removed their retaliatory
tariffs on imports of U.S. agricultural products.
U.S. agricultural trade with Canada and Mexico, which typical y showed a smal surplus prior to
2014, has moved into deficit since then, even as the United States maintains a surplus in overal
agricultural trade. In 2019, the United States posted a $12 bil ion deficit in agricultural trade with
the other USMCA countries (Figure 2).
Since 2002, Canada has been the United States’ top agricultural export market, accounting for
about 15% of the total value of U.S. agricultural exports since 2015.31 Mexico was the second-
largest export market until 2010, when China displaced Mexico in that ranking. U.S. exports to
China were lower in 2018 and 2019 than in 2017, as a result of the imposition of retaliatory tariffs
on U.S. agricultural imports by China in response to U.S. tariff increases on certain Chinese
imports.32 In those years Mexico resumed its position as the second-largest importer of U.S.
agricultural products.

27 National Potato Council, “2019 National T rade Estimate Report on Foreign T rade Barriers,” https://spudman.com/
wp-content/uploads/2018/10/National_Potato_Council_-_2019_National_Trade_Estimate_Report_-_FINAL.pdf.
28 CPT PP, Chapter 8, T echnical Barriers to T rade, Annex 8-G Organic Products, https://www.mfat.govt.nz/assets/
T ransPacific-Partnership/Text/8.-Technical-Barriers-to-Trade-Chapter.pdf.
29 Steven Zahniser et al., NAFTA at 20: North America’s Free-Trade Area and Its Impact on Agriculture, USDA, ERS,
WRS-15-01, February 2015.
30 See CRS Report R46242, Major Agricultural Trade Issues in 2020, coordinated by Anita Regmi.
31 Ibid.
32 See CRS Report R45929, China’s Retaliatory Tariffs on U.S. Agriculture: In Brief, by Anita Regmi.
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Figure 2. U.S. Agricultural Trade With Canada and Mexico
In Bil ions of U.S. Dol ars, 1990-2019
U.S. Imports in Billions of Dollars
Canada
Mexico
2018
Total Net Trade
USMCA
$60
signed
$50
2008
$40
NAFTA
completed
1994
$30
NAFTA
implemented
1990
$20 CUSTA
implemented
$10
$0
1990
1994
1998
2002
2006
2010
2014
2018
U.S. Exports in Billions of Dollars
2018
USMCA
$50
2008
signed
NAFTA
$40
completed
1994
NAFTA
$30
implemented
1990
$20 CUSTA
implemented
$10
$0
1990
1994
1998
2002
2006
2010
2014
2018
-$10
USMCA in force
-$20
July 1, 2020

Source: U.S. Census Bureau Trade Data, BICO-HS10, accessed October 2020, at https://apps.fas.usda.gov/gats/
ExpressQuery1.aspx.
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
Geographic proximity provides the United States with a competitive advantage in supplying fresh
fruit, vegetables, and prepared food to Canada. Consumer-oriented food products, such as meats,
dairy, fruit, vegetables and ready-to-eat products, therefore make up about 80% of al U.S.
agricultural exports to Canada (Table 4).
Although U.S. exports to Canada have not grown in total value over the 2015-2019 period,
Canada remains the United States’ largest export market for many agricultural products (Table 4).
Canada accounted for 24% of the value of total U.S. consumer-oriented food exports to al
destinations in 2019.33 The same year, Canada accounted for 74% of the total value of U.S. fresh

33 CRS calculation based on U.S. Census T rade Statistics, accessed November 2020, at https://apps.fas.usda.gov/gats/
default.aspx.
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vegetable exports to al destinations, 51% of snack foods, and 34% of fresh fruit exports to al
destinations. Canada is also an important market for bulk agricultural commodities, and Canadian
imports of U.S. corn, soybeans, rice, pulses, and wheat increased significantly over the 2015-
2019 period (Table 4).
Table 4. Major U.S. Agricultural Exports to Canada
In Mil ions of U.S. Dol ars, 2015-2019
2015-2019
2015
2016
2017
2018
2019

change
Total agriculture
20,989
20,307
20,608
20,867
20,886
0%
Total consumer-oriented
16,865
16,222
16,370
16,216
16,300
-3%
Prepared food
1,909
1,889
1,908
1,931
2,048
7%
Fresh vegetables
1,871
1,807
1,878
1,884
1,986
6%
Fresh fruit
1,649
1,633
1,608
1,533
1,485
-10%
Snack foods
1,332
1,315
1,355
1,407
1,393
5%
Pork & products
778
798
793
765
802
3%
Pet food
602
597
640
645
751
25%
Chocolate & cocoa products
725
749
748
713
713
-2%
Tree nuts
686
598
643
696
697
2%
Dairy products
554
630
637
641
667
20%
Beef & products
900
758
791
745
654
-27%
Poultry meat, excluding eggs
594
510
459
406
354
-40%
Eggs & products
184
98
102
121
99
-46%
Live animals
118
126
251
263
315
167%
Corn
212
146
131
309
349
65%
Rice
160
148
148
175
194
21%
Soybeans
80
106
145
269
181
126%
Pulses
54
101
130
62
105
94%
Wheat
14
18
17
21
37
164%
Source: U.S. Census Bureau Trade Data, BICO-10 groupings, accessed via FAS. USDA, October 2020, at
https://apps.fas.usda.gov/gats/ExpressQuery1.aspx.
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. Selected groupings presented; entries do not sum
to total.
U.S. dairy exports to Canada increased 20% from 2015 to 2019, but the exports of U.S. poultry
meat and eggs declined over 40% during this period (Table 4).
In the first calendar quarter after USMCA entered into force in July 2020, U.S. poultry meat
exports to Canada were 8% higher than during the same quarter of 2019 and 3% higher than the
same quarter of 2018 (Figure 3). U.S. dairy exports to Canada in the third quarter of 2020 were
10% higher than in the year-earlier quarter and 9% above the corresponding quarter of 2018.
Although USMCA has expanded access for U.S. eggs and egg products, U.S. exports of these
products to Canada have not increased compared to the previous two years.
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Figure 3. U.S. Dairy and Poultry Product Exports To Canada
In Mil ions of Dol ars, First 3 Quarters Of 2018-2020
180
160
2018
2019
140
2020
120
100
80
60
40
20
0
Qtr. 1 Qtr. 2 Qtr. 3
Qtr. 1 Qtr. 2 Qtr. 3
Qtr. 1 Qtr. 2 Qtr. 3
Dairy products
Poultry meat
Eggs and products

Source: U.S. Census Bureau Trade Data, BICO-10 groupings, accessed via FAS. USDA, November 2020, at
https://apps.fas.usda.gov/gats/ExpressQuery1.aspx.
Note: Qtr. = quarter.
Mexico has accounted for about 13%-14% of the total value of U.S. agricultural exports since
2015. Geographic proximity, growing population, and an expanding economy have increased
Mexico’s import demand for consumer-oriented food products like dairy, meats, prepared foods,
fruit, vegetables, and other ready-to-eat food products as wel as for pet food. An expanding
domestic livestock sector has also increased Mexico’s import demand for U.S. feed grains,
soybeans, and other feed and fodders. U.S. agricultural exports to Mexico have thus increased
during 2015-2019 period for both bulk commodities and for consumer-oriented high-value
products (Table 5.)
Consumer-oriented products as a group account for a significant share of U.S. exports to Mexico,
and 13% of the total value of exports of this category to al destinations in 2019. This includes
26% of dairy exports, 25% of poultry exports, and 18% of pork exports to al foreign markets.34
During the first three quarters of 2020 (January-August), U.S. exports to Mexico were down 8%
in value ($12.96 bil ion), year-on-year, compared to 2019 ($14.08 bil ion). A market analysis
report points out that Mexico faced difficulties in transportation and logistics with the outbreak of
COVID-19, particularly with regard to a shortage of refrigerated containers,35 which would have
affected trade in perishable consumer-oriented food products.

34 Ibid.
35 T ridge, COVID-19 Market Report: Impact of the Coronavirus on Global Agricultural Trade, March 31, 2020, at
https://cdn.tridge.com/reports/covid19-market-report-v2.pdf.
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Table 5. Major U.S. Agricultural Exports to Mexico
In Mil ions of U.S. Dol ars, 2015-2019
2015-2019

2015
2016
2017
2018
2019
change
Total agriculture
17,695
17,827
18,598
19,090
19,179
8%
Total consumer-oriented
8,378
8,051
8,341
8,590
8,962
7%
Dairy products
1,280
1,218
1,312
1,398
1,546
21%
Pork & products
1,268
1,360
1,514
1,311
1,278
1%
Beef & products
1,092
977
979
1,058
1,107
1%
Poultry meat, excluding eggs
1,029
931
933
956
1,077
5%
Prepared food
705
710
678
743
777
10%
Fresh fruit
560
501
570
619
610
9%
Tree nuts
269
253
256
371
343
28%
Condiments & sauces
218
221
214
215
243
11%
Snack foods
293
296
283
320
342
17%
Fresh vegetables
123
101
134
141
193
57%
Processed fruit
119
112
120
126
135
13%
Nonalcoholic beverages
137
116
139
123
149
9%
Pet food
67
77
85
90
103
54%
Corn
2,302
2,550
2,645
3,061
2,730
19%
Soybeans
1,432
1,462
1,574
1,818
1,878
31%
Wheat
651
612
852
662
812
25%
Feeds & fodders
146
154
158
184
229
57%
Coarse grains, excluding corn
78
132
79
39
132
69%
Source: U.S. Census Bureau Trade Data, BICO-10 groupings, accessed via FAS. USDA, October 2020, at
https://apps.fas.usda.gov/gats/ExpressQuery1.aspx.
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. Selected groupings presented; entries do not sum
to total.
U.S. Imports from Canada and Mexico
Canada and Mexico are the top two sources of U.S. agricultural imports, and jointly provided
40% of the $131 bil ion of U.S. agricultural imports from al sources in 2019.36
U.S. Imports from Canada
Since 2016, Canada has been the second-largest supplier of agricultural products to the United
States, accounting for around 18% of the total value of U.S. imports of these products. About
two-thirds of al agricultural imports from Canada are consumer-oriented products (Table 6).

36 U.S. Census Bureau T rade Data, BICO-6 groupings, accessed via FAS. USDA, October 2020, at
https://apps.fas.usda.gov/gats/ExpressQuery1.aspx.
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Table 6. Major U.S. Agricultural Imports from Canada
In Mil ions of U.S. Dol ars, 2015-2019
2015-2019

2015
2016
2017
2018
2019
change
Total agriculture
21,821
21,526
22,309
23,035
23,612
8%
Total consumer-oriented
13,023
13,390
14,115
14,881
15,669
20%
Snack foods
3,733
4,015
4,192
4,541
4,815
29%
Red meats, fresh/frozen/chilled
2,253
2,217
2,273
2,301
2,444
8%
Processed fruit & vegetables
1,421
1,444
1,496
1,611
1,629
15%
Fresh vegetables
1,207
1,311
1,414
1,520
1,620
34%
Wine and beer
201
184
190
209
246
22%
Other dairy products
124
141
184
186
216
74%
Other fresh fruit
241
225
224
238
203
-16%
Red meats, prepared
124
144
156
173
188
52%
Tree nuts
88
82
97
99
96
9%
Cheese
29
31
32
36
36
24%
Other vegetable oils
1,563
1,812
1,984
1,771
1,790
15%
Nursery products
332
352
374
409
462
39%
Feeds & fodders
326
312
308
347
355
9%
Sugars & sweeteners
367
365
266
279
309
-16%
Live animals
1,799
1,482
1,298
1,199
1,366
-24%
Wheat
689
412
685
782
416
-40%
Teas
90
92
97
86
98
9%
Essential oils
78
89
113
88
74
-5%
Source: U.S. Census Bureau Trade Data, BICO-6 groupings, accessed via FAS. USDA, October 2020, at
https://apps.fas.usda.gov/gats/ExpressQuery1.aspx.
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. Selected groupings presented; entries do not sum
to total.
Major consumer-oriented U.S. imports from Canada include snack foods, meats, processed fruit
and vegetables, and various dairy products. The United States imports feeder cattle (less than one
year old) from Mexico and Canada, which are finished and slaughtered in the United States. A
drought-related decline in livestock production in the United States and increased production of
corn, rapeseed, and soybeans in Canada, along with prevailing hog cycle dynamics in the three
countries, have affected live animal trade patterns, contributing to a decline in U.S. imports of
Canadian livestock.
Under USMCA, the United States is phasing out tariffs on peanuts, peanut butter, and cotton from
Canada. The United States has general y not imported notable volumes of peanuts or cotton from
Canada. Imports of peanut butter from Canada were higher for both the second and the third
quarters of 2020 compared to the same period during the previous two years. The total value of
U.S. peanut butter imports for the January-September period was $51.67 mil ion in 2020
compared to $45.84 mil ion during the same period of 2019 and $43.28 mil ion in 2018.
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Under USMCA, the United States has also expanded TRQ access for Canadian dairy, sugar, and
sugar-containing products. The value of U.S. imports of chocolates and cocoa products did not
increase during the third quarter of 2020 compared year-on-year to the value of imports during
the previous two years (Figure 4).37 In the first quarter after USMCA took effect, U.S. imports of
sugar and sweeteners, at $89.69 mil ion, were 9% higher than during the same quarter of 2019
and 12% above the compared quarter of 2018. Compared year-on-year for the same period, U.S.
imports of dairy products from Canada, at $45.60 mil ion, increased 24% ($38.24 mil ion) from
2019 and 51% ($30.3 mil ion) from 2018.
Figure 4. U.S. Imports of Canadian Dairy, Sugar, and Sugar-Containing Products
In Mil ions of Dol ars, First 3 Quarters Of 2018-2020
400
350
2018
300
2019
2020
250
200
150
100
50
0
Qtr. 1
Qtr. 2
Qtr. 3
Qtr. 1
Qtr. 2
Qtr. 3
Qtr. 1
Qtr. 2
Qtr. 3
Chocolates & cocoa products
Sugars & sweeteners
Dairy products

Source: U.S. Census Bureau Trade Data, BICO-10 groupings, accessed via FAS. USDA, November 2020, at
https://apps.fas.usda.gov/gats/ExpressQuery1.aspx.
Note: Qtr. = quarter.
U.S. Imports from Mexico
Since 2016, Mexico has been the largest supplier of agricultural products to the United States,
accounting for a fifth of the total value of U.S. agricultural imports.38 About 90% of al Mexican
imports to the United States are consumer-oriented food products, such as fresh fruit and
vegetables, processed fruit and vegetables, meats, dairy products, and wine and beer (Table 7).
With the exception of live animals, sugar, and unroasted coffee, the import value of al other
major food categories increased notably from 2015 to 2019. While USMCA does not change
market access for imports from Mexico, the trend of increased imports from Mexico is likely to
continue as a consequence of harmonization of nontariff measures.

37 T he chocolates and cocoa product category may include products beyond those covered by the USMCA tariff-rate
quota. Under NAFT A, the United States did not have any quota restrictions on Canadian imports containing less than
10% sugar by weight .
38 U.S. Census Bureau T rade Data, BICO-6 groupings, accessed via FAS. USDA, October 2020, at
https://apps.fas.usda.gov/gats/ExpressQuery1.aspx.
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Table 7. Major U.S. Agricultural Imports from Mexico
In Mil ions of U.S. Dol ars, 2015-2019
2015-2019

2015
2016
2017
2018
2019
change
Total agriculture
21,034
22,944
24,568
25,941
28,301
35%
Total consumer-oriented
18,415
20,788
22,261
23,429
25,866
40%
Other fresh fruit
4,280
4,939
5,962
5,824
6,933
62%
Fresh vegetables
4,838
5,598
5,472
5,871
6,288
30%
Wine and beer
2,727
3,098
3,321
3,601
3,953
45%
Snack foods
1,716
2,010
2,109
2,196
2,346
37%
Processed fruit & vegetables
1,455
1,526
1,546
1,715
1,842
27%
Red meats, fresh/frozen/chilled
1,071
1,089
1,110
1,200
1,373
28%
Tree nuts
454
608
599
764
730
61%
Fruit & vegetable Juices
302
335
484
445
419
39%
Bananas and plantains
134
127
168
205
215
60%
Other dairy products
97
109
100
123
159
64%
Prepared red meats
18
18
18
21
26
44%
Spices
82
83
86
102
110
34%
Nursery products
50
50
55
58
63
26%
Live animals
888
589
726
841
886
0%
Other vegetable oils
119
136
143
187
193
62%
Feeds & fodders
20
15
15
20
24
20%
Raw beet & cane sugar
405
344
347
445
398
-2%
Coffee, unroasted
200
144
183
192
156
-22%
Source: U.S. Census Bureau Trade Data, BICO-6 groupings, accessed via FAS. USDA, November 2020, at
https://apps.fas.usda.gov/gats/ExpressQuery1.aspx.
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. Selected groupings presented; entries do not sum
to total.
USMCA’s Potential Trade Effects Beyond NAFTA
Many stakeholders have credited NAFTA with facilitating agricultural trade in North America by
reducing tariffs and other market access barriers and by providing a stable and improved trading
environment in the region.39 Studies conducted to estimate the incremental effect of USMCA
indicate modest increases to regional trade in North America. For example, a study commissioned
by the Farm Foundation estimated that USMCA would generate a net increase in annual U.S.
agricultural exports to Canada of $450 mil ion—about 1% of U.S. agricultural exports under

39 For more information see CRS Report R44875, The North American Free Trade Agreement (NAFTA) and U.S.
Agriculture, by Renée Johnson.
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NAFTA in 2017.40 Similarly, the U.S. International Trade Commission (USITC) assessed that
U.S. agricultural exports would likely increase 1.1% in year six of USMCA implementation
compared to its 2017 baseline export levels.41 Another study, conducted by the International
Monetary Fund, estimated smal gains in regional trade from USMCA compared with NAFTA;
with respect to agriculture, it found modest gains to the region, primarily benefiting Canada.42
A study by economists at the University of Georgia says that USMCA may lead to losses for
Georgia’s smal fruit and vegetable producers because of subsidized imports from Mexico.43 The
study was limited in scope and did not examine the broader impact of USMCA on other
agricultural and nonagricultural sectors, other states, or the effects at the national level for the
three USMCA signatories.
Issues for Congress
Congress has an interest in the implementation of USMCA because of its constitutional authority
over foreign commerce and its long-standing involvement in U.S. farm policy.
Regarding market access, Congress may monitor Canada’s implementation of its commitments
regarding U.S. dairy products, poultry products, and eggs. Some Members of Congress have
raised concerns that Canada’s dairy TRQ al ocation may not be consistent with its commitments
under USMCA.44
Congress may also monitor the implementation of the various nontariff provisions that the three
countries agreed to under USMCA, such as assurances by Canada and Mexico that they wil
provide the same treatment to U.S. proprietary food formula and alcoholic beverages as they
provide to their domestic products.45 Some Members of Congress have raised concerns that
Mexico has not taken actions to fulfil its commitments regarding improving access for U.S.

40 Maksym Chepelie et al., “How Differing T rade Policies May Impact U.S. Agriculture: T he Potential Economic
Impacts of T PP, USMCA, and NAFT A,” GT AP Working Paper, no. 84, commissioned by the Farm Foundation,
October 2018, at https://www.gtap.agecon.purdue.edu/resources/working_papers.asp. T his study uses the Global T rade
Analysis (GT AP) model. For more on the GT AP global consortium, model, data, and publications, see
https://www.gtap.agecon.purdue.edu/.
41 USIT C, U.S.-Mexico-Canada T rade Agreement: Likely Impact on the U.S. Economy and on Specific Industry
Sectors, Publication Number: 4889, April 2019, https://www.usitc.gov/publications/332/pub4889.pdf.
42 Mary E. Burfisher, Frederic Lambert, and T roy Matheson, “NAFT A to USMCA: What is Gained?,” IMF Working
Paper, WP/19/73, March 2019. Note both the Farm Foundation and the IMF study use GT AP Computable-General-
Equilibrium (CGE) model.
43 Jeffrey H. Dorfman, Julian M. Worley, and Sharon P. Kane, “T he Impact of the USMCA on Georgia’s Small Fruit
and Vegetable Industries,” Policy Brief, April 22, 2019. T he study uses the input -output modeling system, the Impact
Analyses and Planning (IMPLAN) model. For more on IMPLAN, see David Mulkey and Alan W. Hodges, “ Using
IMPLAN to Assess T he Local Economic Impacts,” accessed October 2020, at https://fred.ifas.ufl.edu/pdf/economic-
impact -analysis/using-implan.pdf.
44 29 Group of Senators letter to USDA Secretary Sonny Perdue and UST R Robert Lighthizer regarding enforcing
Canada’s dairy commitments and Mexico’s common name commitment, August 25, 2020, at
https://www.smith.senate.gov/us-senators-tina-smith-mike-crapo-make-bipartisan-push-enforce-usmca-dairy-
provisions; and House Ways and Means Committee, “ Trump Administration USMCA Implementation Rep ort Card,”
November 2020, at https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/
T rump%20Admin%20USMCA%20Implementation%20Assessment%20.pdf .
45 Some U.S. alcoholic beverages are disadvantaged in retail stores in some Canadian provinces by being assigned less-
prominent shelf spaces compared to Canadian products. For more on this issue, see the section on “ Regulatory
Requirements Regarding Retail Wine Sales in Canada,” in CRS Report R46242, Major Agricultural Trade Issues in
2020, coordinated by Anita Regmi.
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cheeses and agricultural biotechnology products46 and that Canada is making insufficient progress
toward a protocol to al ow the registration of U.S. wheat varieties in Canada. 47
24F
Efforts by the USMCA signatories to establish a coordinated approach for greater harmonization
of SPS rules, rules governing trade in products created with agricultural biotechnology, and rules
pertaining to geographical indications may also be of interest for congressional oversight. This
subject has drawn the attention of some Members of Congress, who have suggested that USTR
and USDA use the GI provisions in USMCA as a model for other trade agreements.48
USMCA has also expanded access for Canadian peanut butter, dairy, sugar, and sugar-containing
products to the United States. Congress may monitor how this improved access to the U.S. market
affects U.S. producers in these sectors and the U.S. rural economy more broadly.
Congress may also use its oversight and legislative authority to address the effects of COVID-19
pandemic on greater integration of the North American market. The COVID-19 pandemic has
placed unexpected stresses on food supply chains, with bottlenecks in farm labor, processing,
transport, and logistics,49 particularly in developing countries such as Mexico.50 According to a
report by a market intel igence company, Mexico has faced logistics and transportation
difficulties including shortages of shipping containers,51 which could affect Mexico’s ability to
trade perishable and packaged food products with the United States.

Author Information

Anita Regmi

Specialist in Agricultural Policy

46 T wenty-nine Senators letter to USDA Secretary Sonny Perdue and UST R Robert Lighthizer regarding enforcing
Canada’s dairy commitments and Mexico’s common name commitment, August 25, 2020, at
https://www.smith.senate.gov/us-senators-tina-smith-mike-crapo-make-bipartisan-push-enforce-usmca-dairy-
provisions; and Senator Ron Wyden Letter to President Donald T rump, October 30, 2020, th at states that Canada’s
tariff-rate quota regulations are not consistent with the USMCA text, and that Mexico has not yet translated its
obligations to recognize certain common names of cheeses or approve U.S. biotechnology products as agreed under the
USMCA.
47 U.S. Senators Kevin Cramer, John Hoeven, T ina Smith, and Steve Daines letter to UST R Chief Agricultural
Negotiator Gregg Doud, July 8, 2019, at https://www.cramer.senate.gov/sen-cramer-colleagues-urge-ustr-address-
grain-article-concerns-usmca.
48 One hundred eleven Members of Congress Letter to UST R Robert Lighthizer and USDA Secretary Sonny Perdue,
Bipartisan Letter to Protect U.S. Food & Wine Exports Using Common T erms, November 2, 2020, at
https://www.nmpf.org/wp-content/uploads/2020/11/Letter-House-Common-Food-and-Wine-Terms-Letter-UST R-
USDA-11.02.2020.pdf. T he letter states, “ to draw upon the type of precedents and commitments established in the
USMCA to further strengthen protections for U.S. producers by negotiating agricultural market access safeguards for
products marketed using specific common food terms, traditional terms, or legitimate plant and grape varietals in all
future U.S. trade negotiations, particularly those of importance to U.S. cheese, meat, and wine producers.”
49 OECD, “Food Supply Chains and COVID-19: Impacts and Policy Lessons,” June 2, 2020.
50 Piergiuseppe Fortunato, “How COVID-19 Is Changing Global Value Chains,” United Nations Conference on T rade
and Development, September 2, 2020.
51 T RIDGE, COVID-19 Market Report: Impact of the Coronavirus on Global Agricultural Trade, March 31, 2020, at
https://cdn.tridge.com/reports/covid19-market-report-v2.pdf.
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Congressional Research Service
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