OPINION The U.S.-Mexico-Canada Agreement has been ratified by all three countries. The agreement is welcome news for U.S. egg producers and U.S. agriculture alike. The trade pact, a modern replacement for the North American Free Trade Agreement, will ease export-market uncertainty for egg producers. It will pave the way for a return to strong and fair trade with our valued trading partners to the north and south.
The new agreement will provide some improvements in market access for U.S. eggs and egg products. Importantly the agreement will also bring trade online for the first time for the United States – helping to reduce red tape at the border, reduce costs and increase predictability for cross-border transactions alleviating trade barriers.
The North American Free Trade Agreement removed intraregional trade barriers and established zero tariffs for certain food and agriculture products. And those will remain under the new agreement. Since the North American Free Trade Agreement was established in 1994, the value of U.S. agricultural exports increased by 271 percent to Canada and 305 percent to Mexico. Currently Canada and Mexico are the first- and third-largest export markets for U.S. agriculture, accounting for more than 25 percent of all U.S. agricultural exports. They are the second- and third-largest importers of U.S. egg and egg products.
Mexico represents a particularly important market for U.S. eggs. Mexico continues to be the greatest per-capita consumer of eggs worldwide – estimated at 23 kilograms or 51 pounds per person in 2018. Its population consumes more eggs per capita than any other country in the world, at about 380 eggs per year. And it’s a number that continues to increase. The projected increase provides an opportunity for exports to Mexico of excellent-quality U.S. eggs and egg products, especially in the processing sector.
Under the U.S.-Mexico-Canada Agreement, Mexico will continue to provide duty-free access for all shell eggs and egg products. Along with the passing of a friendlier revised NOM-159 regulation for U.S. eggs in 2019, the new agreement should provide positive results for U.S. eggs and egg products into Mexico. Mexico is the No. 2 market for U.S. table eggs and the No. 3 market for U.S. egg products.
Canada’s quotas and tariffs are some of the most restrictive because they support their supply management for eggs. The new agreement will loosen those restrictions. With its implementation, U.S. egg exporters will gain additional tariff-free access to Canada by 10 million dozen eggs and egg products per year. That’s a 15 percent increase from the almost 70 million dozen eggs exported in 2017. The agreement increases tariff-free access by 1 percent per year during the next 10 years.
Canada also agreed to allow 30 percent of shell-egg import licenses to be granted to new entrants. And under Canada’s World Trade Organization tariff-rate-quota regime, the United States will be eligible to export as many as 21.37 million dozen egg and egg-equivalent products.
The signing of the U.S.-Mexico-Canada Agreement ensures a strong and stable export market with two of our largest trading partners. Document digitization and online trading will overcome some export access barriers and speed product to market. The agreement is positive for both U.S. agriculture and U.S. eggs.
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