The U.S.-Mexico-Canada Agreement (USMCA) on Wednesday took effect, officially replacing the North American Free Trade Agreement (NAFTA).
The agreement entering into force marks the end of the formal process required to implement a Free Trade Agreement (FTA), known as Trade Promotion Authority (TPA). President Donald Trump on June 29, 2020, signed a Proclamation, taking actions under the USMCA Implementation Act and paving the way for the agreement to enter into force under American law.
“USMCA maintains and could improve market access for U.S. chicken in two of our most important markets in terms of value, Mexico and Canada,” said National Chicken Council President Mike Brown. “It will also positively impact both the U.S. agriculture sector and the broader national economy.
“On behalf of America’s chicken producers, I want to thank President Trump for his leadership and for the tireless work of the administration, including Agriculture Secretary Perdue and U.S. Trade Representative Lighthizer.”
President Trump signed the USMCA on January 28, 2020. It is set to expire upon the end of a 16-year term, which is renewable. The USMCA replaces NAFTA, which took effect on January 1, 1994.
The USMCA preserves full market access for U.S. chicken product exports to Mexico, just as NAFTA had maintained. USMCA sets a flat Tariff Rate Quota (TRQ) of 57,000 metric tons by Year 6 of the agreement, growing one percent per year for an additional 10 years. In contrast, NAFTA applied a floating TRQ of imports up to 7.2% of Canada’s previous-year domestic chicken production.
Mexico and Canada are the two largest markets by dollar value for U.S. broiler meat exports, with a value of $604 million and $296 million in 2019, respectively.
