AMARILLO, Texas (KFDA) - The United States, Mexico, Canada Agreement (USMCA) recently went into effect.
This is a free trade agreement between the three countries that is predicted to have a two billion dollar impact on the United States economy.
“We produce 28 percent roughly of the nation’s fed cattle supply and exports are a big part of that,” said Ross Wilson, CEO of Texas Cattle Feeders.
The original trade agreement between the United States, Mexico and Canada was created in 1992 and had not been updated since.
“Those trade agreements are the open door, so to speak for access to two really strong markets,” said Wilson. “On an annual basis, those two markets account for nearly two billion dollars every year in purchases of U.S. beef and a lot of that would come from Texas.”
This updated trade deal is predicted to impact farmers in the Texas Panhandle by creating new job opportunities and increasing the revenue received from sales.
“We are such a low cost provider of beef, that us being able to produce beef and export that product to Mexico, Canada and other countries results in a net higher price for our live cattle and beef here in the United States,” said Justin Benavidez, assistant professor of agricultural economics with the Texas A&M AGRILIFE Extension Service.
But what does this mean for those of us who aren't farmers?
It means we could see lower prices in products.
“In general, free trade does lower the cost of goods,” said Benavidez. “If Mexico can produce something cheaper than the United States can produce it, then that gives us access to purchasing cheaper products. So let’s say United can go buy something cheaper in Mexico, than here in the United States, they would be able to provide you, the consumer with a cheaper product.”
The fact that this agreement was reached during a pandemic is unique in itself.
“The final implementation in USMCA, in spite of the COVID situation is a testament to the strong trade relationship between these three countries,” said Wilson.
Benavidez said this agreement is important because Mexico and Canada are the number one and number two trading partners with the United States.