Small and rural communities often depend on trade and export markets to keep the lights on and the doors open at their farms and businesses. The new North American trade deal – the United States-Mexico-Canada Agreement (USMCA) – is a critical step to improving access to two of our most important markets: Canada and Mexico.
Iowa has a particularly important trade relationship with these two nations. Canada and Mexico are Iowa’s top trading partners, in that order. Together, they bought over half of the overall value of exported goods from Iowa in 2018. The total value of products exported to Canada in 2018 equaled $4.2 billion and $2.3 billion to Mexico.
If ratified by Congress, USMCA would be a boon for Iowa and the entire country. The importance of trade with our North American neighbors can’t be understated. It accounts for nearly one-third of our nation’s agricultural exports, totaling over $40 billion and supporting more than 300,000 jobs. More than 43,000 American manufacturers export to Mexico and Canada, supporting approximately two million American jobs. Roughly 130,000 small- and medium-sized businesses export billions of dollars worth of goods to Mexico and Canada every year. USMCA improves access to these critical markets and creates important new export opportunities.
Farmers producing dairy, poultry and eggs would all see improvements under USMCA. The trade deal would open new Canadian markets for U.S. dairy products, specifically milk. It would preserve tariff-free market access for dairy products in Mexico and would also provide Canada new and improved access to U.S. poultry and eggs. This helps Iowa in particular, as we are the number one egg-producing state in the country. Mexico is the top importer of U.S. turkey and Canada is not far behind. As the fifth-largest turkey processor and eighth-largest turkey producer nationwide, Iowa would see direct positive impacts from USMCA.
USMCA is also good for manufacturing. Canada and Mexico are the United States’ largest markets for manufactured products and trade with them supports approximately two million American manufacturing jobs. For Iowa, trade in manufactured goods is particularly important. We exported nearly $12 billion in manufactured products in 2018. Iowa exported over $3 billion in manufactured goods to Canada and over $1 billion to Mexico last year. More than 25,000 Iowa manufacturing jobs depend on the Mexican and Canadian markets. Under USMCA, the U.S. not only preserves duty-free trade with our North American neighbors, but also secures benefits like avoiding unnecessary in-country testing, saving our industries money and making our products more competitive. USMCA also levels the playing field for American workers by providing greater incentives to source goods and materials in the United States and North America.
Nearly 300,000 small businesses in the United States export goods and services internationally. In Iowa, small businesses employ almost 50 percent of the private workforce and roughly 2,300 Iowa small businesses depend on foreign markets. USMCA would create information sharing tools and cut red tape for low-value shipments in order to help small business owners operate more efficiently and cost effectively. Further, USMCA would establish a committee to collaborate on and expand market opportunities for small- and medium-sized businesses.
In short, USMCA delivers important benefits to the communities that need them the most. I’m engaged in ongoing discussions with my congressional colleagues, as well as President Trump and his administration regarding steps forward on USMCA. I urge my colleagues to move quickly to pass this critical trade deal through Congress so Americans can reap its many benefits swiftly.
Author: Charles Grassley
Chuck Grassley of New Hartford has represented Iowa in the United States Senate since 1980.
