Vermont Business Magazine President Trump,President Peña Nieto of Mexico and Canadian Prime Minister Justin Trudeau have agreed on the United States-Mexico-Canada Agreement (USMCA). Vermont potentially could benefit, including in auto parts manufacturing and dairy exports. Mexico is Vermont's largest dairy export partner. Canada has production quotas and price guarantees for its dairy industry, which is much prized in Quebec, but would have to open up its markets to some degree.
The legislative bodies of all three countries would need to ratify the deal, which is not a sure thing in the United States Congress or Canadian Parliament, in large part because of the agriculture provisions. Vermont, however, has been looking for dairy relief, as Canadian milk is about 50 percent more expensive than Vermont's and the state's dairy farmers are leaving the industry at a brisk rate. For auto parts, growing firms like Sonnax in Bellows Falls and NSK in Bennington could benefit from auto parts sourcing requirements.
Governor Phil Scott on Mondayissued the following statement on the USMCA: “I’m very pleased to see leaders in the U.S., Mexico and Canada come to an initial agreement that modernizes the free trade agreement governing these three countries while keeping our trilateral partnership intact.
“In the Northeastern U.S., the relationship with our neighbors in Canada is a vital part of our economy and culture. Since 1993, Canada has been our fifth-largest source of foreign capital. We’ve seen a boom in travel and tourism with Canadians making 21 million trips to the U.S. and spending $24 billion every year. Additionally, we build things together. About half of all trade with Canada takes place between related companies, building complex, integrated supply chains in aerospace, information technology, construction materials, food systems and more.
“These relationships and the trade between countries is essential to Vermont’s economy, which is why I’ve advocated for a continued, though modernized, agreement that includes Canada. So, I appreciate the work done to reach this new agreement.
“While we work to learn more and fully understand the impact for Vermonters and Vermont businesses, I’m optimistic the updated agreement will have a positive impact in Vermont, particularly for our dairy industry. I look forward to working with my team to further analyze this latest agreement and the impacts for our state.
“This agreement has a way to go before being implemented, but I believe this is an encouraging step forward. At the state level, I will continue to work to expand and strengthen Vermont’s relationship with our Canadian neighbors as we work together to advance our shared economic interests and common values.”
A White House statement on Monday said: "President Trump has negotiated a new United States–Mexico–Canada Agreement (USMCA), which will benefit American workers and businesses where North American Free Trade Agreement (NAFTA) has failed."
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The genesis of NAFTA began with Ronald Reagan, who envisioned a North American common market while campaigning for president in 1980. The initial agreement was between Canada and the US. Mexico joined in the early 1990s and NAFTA was signed by President George HWBush, Mexican President Salinasand Canadian Prime Minister Brian Mulroney in 1992.