Former U.S. Sen. Max Baucus is lending a hand in getting Congressional approval for a new free trade agreement with Canada and Mexico.
Baucus was in Billings Friday with members of Farmers for Free Trade to discuss the U.S.-Mexico-Canada Agreement, or USMCA. The group is traveling the county whipping up support for the agreement negotiated by President Donald Trump as a replacement for the North American Free Trade Agreement.
“There’s a lot of national discourse about trade, but it tends to be focused on manufacturing jobs and so forth in the cities and urban America, not in the hinterland, not focused on agriculture,” said Baucus, who is also former U.S. Ambassador to China. “And agriculture, the discussion of trade in respect to agriculture, gets lost. It just doesn’t make the headlines. It tends to be almost forgotten.”
Montana malt barley has become a key ingredient for Mexican breweries. Hi-Line wheat farmers would like to move their grain to Canadian elevators when economics are favorable. USMCA could help both of those issues, said Michelle Jones, immediate past president of the Montana Grain Growers and a member of Farmers for Free Trade.
It has been almost six months since Trump signed off on USMCA. As a candidate, he pledged repeal of NAFTA, replacing it with a more favorable deal for the United States. The new agreement is slightly different from the old deal, but is widely described as NAFTA 2.0. At least initially, the goal was to get the deal approved by Congress by summer 2019.
Summer passage makes sense, said Brian Kuehl, of Farmers for Free Trade. A former legislative director for Baucus, Kuehl said getting USMCA through Congress this summer would prevent it from getting caught in the churn of the 2020 presidential election cycle.
Trade agreements were a casualty of the 2016 elections. Populist campaign messages warned of jobs moving out of the country because of trade agreements, particularly NAFTA. Both Trump and Democrat Hillary Clinton campaigned against passing the 11-nation Trans-Pacific Partnership, a trade agreement considered crucial for selling Montana wheat and beef to Japan and other markets in the Asia Pacific.
As Japanese tariffs decline for countries who stuck with TPP, Montana farmers have started losing market share to TPP countries like Australia and Canada, Jones said. More than 70% of Montana’s wheat is exported and most of that is sold in the Asian Pacific region, where Japan is the state’s biggest grain buyer. Those lost sales started in January and should continue for years as tariffs continue to decline for TPP partners. The Trump administration is trying to negotiate a bilateral agreement with Japan, but the discussion is still fairly early in the process.
Summer passage of USMCA would also prevent the agreement from being trampled in the politics of the U.S. border with Mexico. Weeks ago, the president threatened to block all traffic over the border, a threat with disastrous consequences for trade on everything from produce to automobiles.
To get USMCA approved, the Trump administration needs some support from House Democrats and willingness from House Speaker Nancy Pelosi to take it up. As Baucus knows from dealing with trade deals in Congress during the past four decades, Pelosi hasn’t accommodated trade deals of Republican presidents. President George W. Bush struggled to get House support for trade deals smaller than USMCA when Pelosi controlled the House in the late 2000s.
U.S. Sen. Jon Tester, D-Mont., has opposed trade agreements, including TPP, the Korean-U.S. trade agreement, the U.S.-Colombia Free Trade Agreement, and the U.S-Panama Free Trade Agreement. Those agreements, Tester has said, haven’t created U.S. jobs. That’s a claim Baucus strongly disagrees with.
U.S. Sen. Steve Daines, R-Mont., is a member of the Senate Finance Committee, like Baucus before him. He supports USMCA and has been advocating for congressional action since November.
“With over 95% of the world’s consumers outside of the U.S., reducing barriers to trade and expanding access to foreign markets is one of the senator’s top priorities,” said Julia Doyle, a Daines spokeswoman. “Advancing USMCA will be critical to maintaining or expanding access to important markets in Canada and Mexico and will help provide more certainty for Montana farmers, ranchers, and businesses. As a member of the Senate Finance Committee, which has jurisdiction over trade, the Senator will continue to actively work with the administration and his colleagues to make sure this agreement is implemented.”