With its concentration of manufacturing, agriculture and dairy businesses, Northeast Wisconsin stands to benefit from provisions in the United States-Mexico-Canada Agreement (USMCA), a key figure from the U.S. Department of Commerce told businesses leaders at a roundtable discussion in Green Bay.
The Greater Green Bay Chamber hosted the discussion between Peter Davidson, general counsel for the U.S. Department of Commerce, and representatives from small, medium and large businesses from the greater Green Bay area.
“I think USMCA is going to be a big boost for Wisconsin and the greater Green Bay area as well,” he told the group.
Davidson says the USMCA stemmed from a desire to renegotiate the North American Free Trade Agreement to rebalance trade relationships and eliminate barriers. The Office of the United States Trade Representative touts it as a “mutually beneficial win for North American workers, farmers, ranchers and businesses.”
“There are several agricultural provisions in the USMCA that I think will be beneficial, particularly in the dairy areas. There are some real breakthroughs on Class 6 and Class 7 grade milk,” Davidson says.
Eliminating milk classes 6 and 7 would mean ending a program that allowed low-priced dairy ingredients to undersell United States dairy sales in Canada and third-party governments, according to The Office of the United States Trade Representative.
Green Bay-based Edge Dairy Farmer Cooperative has lauded the USMCA provision for “leveling the playing field” for dairy trade with Canada and keeping its relationship with Mexico intact.
“Keeping Canada in the trade deal is a critical win for our dairy farmers. The partnerships built over the years with Canada and Mexico through NAFTA have been a major part of growth for our businesses. We are both relieved and excited to know that we can continue to maintain both of those markets,” Brody Stapel, president of Edge and a farmer in Cedar Grove, said in an October 2018 statement.
In addition to wins for the dairy industry, Davidson says small- and medium-sized businesses stand to benefit. Forty percent of Wisconsin exports go to Canada and Mexico, and small- and medium-sized businesses comprise a majority of companies in Wisconsin, with only about 150 employing more than 500 workers.
Provisions within the agreement would offer several means for streamlining trade with Canada and Mexico. These include allowing smaller shipments to get through more quickly, reducing red tape, adding transparency and publishing rules that would make costs clearer prior to exporting a good or service, Davidson says.
Other major provisions include rules of origin designed to encourage more goods and materials manufacturing within the United States, stronger intellectual property rights, a new chapter on digital trade, anti-corruption measures and labor standard requirements.
In June, Mexico became the first country to ratify the USMCA. Canada will hold elections in October, so that adds some uncertainty to the agreement’s fate in that country.
Davidson says he would like to see Congress ratify the agreement by the end of summer. He expects it to clear the Senate, but more pushback could come from the House of Representatives. Democrats have expressed concerns about areas including labor standards and enforcement.
Davidson, however, argues the agreement offers benefits that outweigh any drawbacks. Furthermore, he says, it could provide a strong template for negotiating other trade deals.
“It really creates a gold standard for future trade deals,” he says.
For more information
To learn more about the USMCA, visit trade.gov/usmca.
For information specific to Wisconsin, visit ustr.gov/sites/default/files/files/Press/fs/USMCA/USMCA_Wisconsin.pdf.
The Wisconsin Small Business Development Center at UW-Oshkosh provides no-cost professional consulting to help companies with trade issues.