USDA Undersecretary Luke Lindberg discusses the status of USMCA

MITCHELL, S.D. — Luke Lindberg, undersecretary for trade and foreign agricultural affairs at the U.S. Department of Agriculture, said the goal for the future of trade relations with Mexico and Canada is to build more market access for United States agricultural producers. About 17% of U.S. agricultural exports end up in Mexico and 16% end up in Canada, Lindberg said while in Mitchell for Dakotafest on Aug. 19. ADVERTISEMENT “Right now, we have an agricultural trade deficit with Mexico that is $17.5 billion a year and it’s over $11 billion a year with Canada. So, that means that Mexican and Canada farmers are selling a lot more agricultural products to our folks here in the United States,” Lindberg said. He said President Donald Trump "believes in fair, reciprocal trade" and wants to see more access for producers. "The goal is not to get to a situation where we cannot trade with them. We recognize that USMCA agreement has been net-net a very good deal for U.S. farmers in total in increasing export opportunities, but we think we can do even better," Lindberg said. The United States-Mexico-Canada Agreement began in July 2020 and serves as a replacement for the North American Free Trade Agreement. The Trump administration on July 1, declined to extend the agreement, which moved the agreement from a 16-year extension to an annual review cycle. Lindberg pointed to challenges under the agreement, including Canada not implementing dairy provisions as intended and Mexico for a time not accepting GMO corn. While imports from the countries are important, Lindberg said it’s important for American producers to have opportunities to compete. “U.S. consumers do benefit from eating a lot of those Mexican produce and things like that, but we want to make sure that U.S. produce growers as well have the opportunity to compete here for the domestic mouths and grocery store shelves,” Lindberg said. “The goal here is just to make sure, again, that our producers are successful both here and overseas, but then also open up new opportunities to sell those products that we create here into those markets.” ADVERTISEMENT Lindberg thinks there could be new trade opportunities for ethanol in Mexico and said there have been productive trade conversations. “I’ve been down to Mexico twice here in the past month, and I’m optimistic that we can look at a way that Mexico could adopt an ethanol fuel blend into their fuel supply down there, creating billions of dollars in opportunity for U.S. corn farmers,” Lindberg said. “Canada already is a great buyer of U.S. ethanol, so replicating that same kind of process in Mexico would be a big win.” Trump wants to see changes in the U.S.'s agreements with Canada to get more dairy products and alcoholic beverages from the U.S. into the northern country. Lindberg said U.S. alcohol products are not for sale in Canada. “We have to fix some of these fundamental challenges before we can really begin in earnest to have those productive trade discussions,” Lindberg said. He pointed to an ice wine, in particular. "Canada, not really known for their ice wine production, but we're importing more ice wine from Canada than they're buying of our beautiful Napa Valley Cabernet. Doesn’t make a lot of sense. So we need to fix some of these challenges before we can begin in full earnest to negotiate those deals.” The U.S. is involved in a majority of the trade happening in the agreement. “But remember, in recognizing that when it comes to the U.S.-Mexico-Canada agreement, we have three countries involved, but the reality is that 98% of the trade that occurs under USMCA happens between Mexico and the United States and Canada and the United States,” Lindberg said. “Only 2% happen between Mexico and Canada. They’re not even meeting themselves at this point in time to negotiate a review on the agreement. So really we have a lot at stake here to make sure that we can continue to be successful if this agreement is going to be the long-term basis for agricultural trade for U.S. farmers.” The agreement still stands while it is in the revision process. Lindberg said there is no timeline for when the revision process will be completed. ADVERTISEMENT “I think, for us, the biggest thing we’re focused on is getting the right deal in place,” he said.