Testimony to the U.S. House on the USMCA

Chairman Thompson, Ranking Member Smith, and distinguished Members of the Committee:

• Thank you for the opportunity to testify on the importance of the United States-Mexico-Canada Agreement (USMCA) to American agriculture.
• We at the U.S. Chamber are unabashed supporters of the USMCA because the agreement has proven itself indispensable to U.S. businesses, farmers, growers, producers, workers and consumers.
• More than 13 million American jobs depend on trade with Canada and Mexico, and the USMCA has fostered U.S. economic growth in a manner that supports many additional high-wage positions.
• U.S. manufacturers export more made-in-America goods to Canada and Mexico than they do to the next 12 largest U.S. export markets combined.
• Canada and Mexico are the top export destinations for more than 100,000 small- and medium-sized American businesses, including family farmers and growers, which benefit from the USMCA's first-of-its-kind provisions catering specifically to the SMEs that serve as our economy's primary engine of job creation.
• Our North American neighbors are also the source of critical imports essential to the competitiveness of U.S. industry and manufacturing, many of which are unavailable from domestic sources at reasonable prices or in sufficient quantities.

USMCA Agriculture Exceptionalism

• Indeed, no sectors embody the success of the USMCA more than food and agriculture.
• Canada and Mexico are the destinations for a full one-third of U.S. ag exports, totaling $59 billion annually.
• Canadian and Mexican foreign direct investment in the U.S. food products sector totaled $17 billion in 2024, up more than 25% since the USMCA's entry-into-force.
• Best in class sanitary and phytosanitary rules have helped ensure transparency, information-sharing and science-based decision-making on which U.S. food and Ag interests rely in all three countries.
• And no sector better exemplifies the deeply intertwined supply chains and co-production which have become true hallmarks of the USMCA's efficiency:
• Canada and the U.S. boast deep intra-industry connections that support trade within sectors and products such as grains, feed, beef and pork.
• Mexico and the U.S. enjoy a complementary trade relationship that sees grains, oilseeds and meat flow south, while vegetables and fruit that the U.S. doesn't produce in the winter or in sufficient quantities flows north.

Chamber USMCA Review Priorities

As the joint review process advances, the Chamber's priorities are straightforward:

1. First, maintain and strengthen the trilateral rules of the USMCA that support U.S. jobs and enhance North American competitiveness.
2. Second, provide certainty and confidence to investors and producers by completing a transparent, expeditious, and orderly joint review.
3. And, third, secure a renewed commitment to full compliance with the agreement-and enforce the terms when compliance falls short, including in the food and agriculture sectors:

Need for Compliance in North American Food and Agricultural Trade

• Canada is falling short on USMCA compliance and implementation in dairy market access.
• Mexico is failing to adhere to its obligations related to the pace of approvals for agricultural biotechnologies and food products.
• And in imposing tariffs on Canada and Mexico, the U.S. is in violation of the USMCA's core commitment to maintain tariff-free trade within North America;
• Section 232 tariffs on steel and aluminum in particular have adversely impacted prices of products ranging from farm equipment to food and agricultural packaging.

USMCA: A Bulwark of Affordability

• Indeed, today's hearing coincides with the release of a report this week that highlights the significant food- and agriculture-related cost savings that tariff-free trade in North America has delivered for U.S. businesses and consumers.
• Key findings of the study, conducted by Purdue University and commissioned by the Corn Refiners' Association and the Agriculture Coalition for USMCA, include the following:
• U.S. households save an estimated $700 annually on food costs in today's dollars-equivalent to roughly 7% of household food spending.
• Every 1% reduction in food tariffs is associated with an average 2.8% decrease in food prices over time.
• The benefits of tariff-free trade in North America are greatest for lower-income households, which spend a larger share of their budgets on food.
• And. . .reversing USMCA tariff preferences would increase food prices and place additional pressure on household budgets.

Conclusion

• I will close by echoing the message conveyed in a bipartisan letter to the U.S. Trade Representative last November by over 100 Members of the House of Representatives, including many of you on this distinguished committee:
• "USMCA was truly a landmark agreement for American agriculture when it entered into force, and its positive impact on U.S. agriculture has yet to reach its maximum benefit. At a time when economic challenges threaten the livelihood of family farms, producers need the certainty provided under USMCA more than ever."
• The U.S. Chamber couldn't agree more, and we will continue working closely with all of you to ensure that the U.S. farmers, growers, processors and producers who've been a true backbone of this country's economy can continue to leverage duty-free trade in North America to create jobs and drive growth.
• Thank you again for the opportunity to testify, and I look forward to your questions.