Agricultural Perspectives on the Future of the USMCA

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Uh, the committee will come to order. Welcome and thank you for joining today's hearing entitled Agricultural Perspectives on the Future of the USMCA. After brief opening remarks, members will receive testimony from our witnesses today and then the hearing will be open to questions. So, once again, uh, good morning everyone and thank you for joining us t- today at this important hearing to discuss US agricultural perspectives on the future of the United States, Mexico, Canada agreement, otherwise known as USMCA. To each of our witnesses, thank you so much for taking time out of your busy schedule to share your expertise with us. As we all know, USMCA is a trilateral trade agreement between US, Mexico and Canada that entered into force on July first, twenty twenty. USMCA replaced the North American Free Trade Agreement, or NAFTA, but most importantly it created a more reciprocal balanced free trade agreement between our countries. As the agreement is up for review in July, it is more important than ever to talk about what USMCA means for US agriculture. USMCA maintains tariffs-free treatment for certain agricultural products while expanding market access for a range of US grown commodities. This has proven to be extremely beneficial, not only to our US farmers, ranchers, foresters and agribusinesses, but also to US consumers and the economy as a whole. To get us started, I'd like to share a few statistics that highlight those benefits. Economic models show that in two thousand twenty-four alone, agricultural and seafood exports to Canada and Mexico generated a hundred and forty-nine billion dollars in total economic contributions to the US economy, supporting nearly half a million American jobs and generating thirty-six billion dollars in wages. Since USMCA took effect, Mexico and Canada have collectively purchased more than sixty billion dollars in US ag commodities annually accounting for roughly one third of all US ag exports. Uh, Mexico and Canada together account for over forty percent of all U S dairy exports by value, meaning that U S MCA remains the most commercially significant trade agreement for the U S uh dairy industry. For the U S forest product sector, Canada accounts for thirty-nine percent of imports, and Mexico accounts for twenty-four percent of the export market. For fruits and vegetables, exports from the U S to Canada and Mexico reached over seven billion dollars in two thousand twenty four representing roughly two thirds of all global US fresh produce exports. Canada and Mexico together accounted for four billion dollars in exports and marketing year two thousand twenty four f for the soybean industry. Two thousand twenty five US meat and poultry exports exceeded twenty three billion dollars in exports to Canada and Mexico accounted for eight billion dollars of that total. For agribusinesses, USMCA's provisions on things like sanitary and phytosanitary measures help ensure that legitimate health and safety roles do not become barriers to trade. A recent study by Purdue University also has found that North America trade agreements including USMCA have helped lower food prices for US households generating an estimated savings of seven hundred dollars per year. Now these statistics and many others across the agricultural commodities proved why USMCA is so important to the US ag industry. Now I must also recognize that there are provisions within USMCA that could and should be improved upon in the upcoming renegotiations. Canada's implementation of its dairy commitments on both the T TRQs and export disciplines have not met the mark. US forced product manufacturers continue to struggle under chapter ten binational panel review process. reinforcing and building upon USMCA's labor requirements, biotechnology provisions, food safety standards and registration approvals will be paramount. As we look to the coming months, I am confident that the US government will continue to work closely with industry experts and our trading partners to renegotiate and solidify this critically important trade deal. Now, I look forward to hearing from our witnesses today about the ways in which UMCA impacts their operations. as well as what their suggestions are for improvements. So, thank you again to our witnesses for being here today. With that, I'd now like to welcome the distinguished ranking member, the gentlewoman from Minnesota, Miss Craig, for any opening remarks you would like to give.

Thank you, Mister Chairman, uh, good morning and thank you to our witnesses in advance for your testimony today. I look forward to hearing from you about the importance of USMCA improvements that we can make during this review process and the overall trade environment. I wanna say up front that while I'm happy to have a great group of witnesses before us, I'm disappointed that USTR and USDA did not make themselves available for this hearing. Agriculture is a huge part of USMCA and this committee needs to have the opportunity to hear directly and publicly from the administration. on how they are advancing agriculture interest during negotiations. Right now, America's farmers are facing the worst economic crises since the nineteen eighties. Inputs are up, prices are down, and markets in many cases have been decimated. Now more than ever, they need trade certainty to help weather the storm. They are pleading for it, not trade, not aid. Yet, for the past year and a half, we've watched this administration do the exact opposite. It's destroyed America's reputation as a reliable trade partner. We've seen an abuse of tariffs and an inconsistent approach to trade barriers that raise prices for consumers, while creating an unpredictable business environment. Amidst this cloud of economic uncertainty, family farmers have been able to largely turn to our allies to the North and South as reliable markets for our goods. They've served as ports in the storm during this difficult economic times. Now, by threatening to blow up USMCA, the President and his administration are threatening the last source of trade certainty our farmers have. They're right to have concerns. This President is unstable. In the past year, the President has asked, " Who would ever sign a thing like this?" This might surprise the current Trump administration, but USMCA was negotiated by the first Trump administration and signed by President Trump. And while USMCA may not be perfect, there are certainly improvements that we should make. It's still vital for American farmers, ranchers, foresters and businesses. In our continued pursuit to feed, clothe, and fuel the world, Mexico and Canada remain our top agriculture trade partners. Our relationships with these allies put money in the pockets of family farmers and creates and supports jobs up and down the food supply chain. In just the last year, my state, Minnesota, exported over two billion dollars worth of agriculture products to Mexico and Canada. Our top ag exports are corn, grain, and oilseed milling products and soybeans. Minnesota exported fifty-one million in eggs to Canada, and forty-four million worth of sugar to Mexico. In total, agricultural exports to Mexico and Canada support nearly ten thousand jobs in Minnesota. That's ten thousand people in Minnesota able to keep food on their table, raise a family, and put a roof over their head because of American trade. That's ten thousand Minnesotans whose jobs are at risk because President Trump would rather bully allies than build with them. It worries me when the President calls USMCA irrelevant. It's even more concerning that at a time when we should be working with our allies to lower costs for farmers and fight back the influence of China that the President announced a new ten percent tariff on Canada, Mexico, and the EU. The ti timing could not be worse for more chaos. Our farm economy cannot take any more shocks to the system. Right now we need to be strengthening our relationships with allies, not undermining them. And I think that the testimony we hear today will affirm that trade across North America is absolutely vital. I look forward to having a frank conversation today. Thank you again to our witnesses for being here, and Mr. Chairman, I yield back.

The chair would request that other members submit their opening statements for the record so the witnesses may begin their testimony and ensure that there's ample time for questions uh our first witness today is Mr. Michael Lichte, the Chief Insights and Optimization Officer at Dairy Farmers of America. Our next witness is Mrs. uh Christian Salin, the Vice President of the Government and Corporate Affairs at at Weyerheiser. Our third witness today is Mr. Dave Bogula. Uh, Mr. Bogula is uh is the uh President and Chief Executive Officer of the Western Growers Association. And I'll now yield to the ranking member to introduce our next witness.

Thank you, Mr. Chairman. Our next witness today is Mrs. Jamie Beier. Mrs. Beier has a farm near Wheaton, Minnesota, where she and her husband Rod grow soybeans, corn, sugar beets and alfalfa. She serves on the board of directors of, is and is an executive committee member at the American Soybean Association. Thank you, Mister Bu- Mrs. Buyer for being here today and I look forward to hearing the farmer's perspective.

Our fifth witness is Mister Michael uh Schumpf, the Senior Director for International Affairs at the Meat Institute. And our final witness today is Mister Neil Harrington, the Senior Vice President for the America's uh program at the United States Chamber of Commerce. I wanna thank all of our witnesses for uh joining us today. Um I think hearing from you all will is a great pretext to our work with uh USTR, uh because we wanna be your voice. And so really excited about this uh this panel that we've uh mustered together today. And we're now gonna proceed to your testimony. You each have five minutes to timer in front of you, we'll count down to zero at which time your time has expired. Uh, Mr. Lichty, please uh begin when you're ready.

All right. Thank you, Chairman Thompson. Uh, Chairman Thompson, Ranking Member Craig, and members of the committee, thank you for the opportunity to testify today on the importance of the United States, Mexico, Canada agreement to the US dairy sector. My name is Michael Lichty, and I serve as Chief Insights and Optimization Offer Officer for Dairy Farms of America. DFA is the largest dairy cooperative in the United States, representing nearly nearly five thousand family dairy farms, and marketing more than sixty four billion pounds of milk annually. Our scale gives us a direct line of sight into how trade policy shapes the milk prices our farmer owners depend upon to sustain their operations, their families and their communities. I appreciate the opportunity to share our perspective on how USMCA is working today, and where improvements are needed to ensure the agreement delivers real results for our farmers as we approach the joint review. Exports are essential to the future of the US dairy industry. Today export demand accounts for roughly seventeen percent of US milk production, and is a key driver of growth across our sector. For dairy farmers, the ability to access and compete in global markets directly supports the milk prices they receive and the investments made across rural America. Within the broader export picture, USMCA remains the most important trade agreement for US dairy. Mexico and Canada together account for more than forty percent of US dairy export value. For our farmers, stable and reliable market access is not optional, it is foundational to their ability to operate and plan for the future. First, I want to emphasize that USMCA is working well in Mexico. Mexico is the most important trading partner for the US dairy industry. purchasing billions of dollars of US dairy products each year that are used throughout the manufacturing, retail, and food service channels. This relationship has been built over decades through open markets, strong partnerships, and close coordination between our industries. It stands today as a clear example of how trade agreements can deliver mutual benefit when implemented effectively. For DFA, this success is very real. Mexico is our largest export destination. representing over fourteen percent of our total export revenue. This growth reflects what happens when US dairy farmers are given a fair opportunity to compete. They are able to deliver. And every dollar of export revenue generated in Mexico flows back through our cooperative and supports the milk prices paid to our farmer owners. As we approach the joint review, it is critical that we preserve this success. That includes maintaining duty-free access, ensuring that emerging policy developments, such as Mexico's push for milk self-sufficiency or the potential restriction on common cheese names do not undermine the open market access that has supported our growth thus far. At the same time, USMCA has not delivered the same level of results in Canada. While the agreement established new opportunities for market access, those opportunities have not consistently translated into commercially meaningful outcomes for US dairy exporters. In practice, Canada's administration of its dairy quotas has limited their usability. In some cases, access that was negotiated has been only partially utilized. For example, in twenty twenty-five, less than ten percent of the available access under the yogurt quota was ultimately filled. At the same time, Canadian dairy pricing policies, especially for nonfat milk solids, continue to create conditions that distort trade, and impact competitiveness for US producers. For our farmer owners, the outcome is clear. Access that exists on paper is not consistently translating into real market opportunities. As the joint review moves forward, improving how these commitments function in practice will be important to ensuring the agreement delivers real results for US farmers. In closing, USMCA remains one of the most important trade frameworks supporting the US dairy industry, and the rural communities we serve. As policymakers look ahead to the joint review, we encourage a focused approach, preserve what is working, particularly our strong relationship with Mexico, while ensuring that the agreement delivers meaningful results across all markets. At the end of the day, our farmers are asking for one thing, a fair opportunity to compete. When they have that opportunity, they win, and with the right focus, USMCA can continue delivering the opportunities

Mr. Lichty, thanks so much for your testimony. Uh, Mrs. uh, Salwin, uh, please begin when you're ready.

Thank you, Mister Chairman, Ranking Member Craig, and honorable members of the committee. I am Kristen Salwin, Vice President of Government and Corporate Affairs at Weyerhaeuser, appearing today on behalf of the National Alliance of Forest Owners, of which Weyerhaeuser is a member. NAFO represents private forest landowners who collectively own over forty-four million acres of sustainably managed working forests in the United States. Weyerhaeuser, we own ten and a half million acres. We appreciate the opportunity to share our perspectives on why trade policy matters to the US forest product sector and offer some ideas on how Congress can ensure a level playing field for the American forest landowners. American private working forests are among the productive and sustainably managed in the world. We grow fifty-three percent more fiber than we harvest annually. Unfortunately, we are seeing some significant market disruptions. Since twenty fourteen, there have been over thirty-five pulp mill closures and a twenty percent contraction of logging capacity in the United States. Increasingly, export markets are an important segment of the overall economic picture for our s our sector. Wanna talk a little bit about some trade data, f first in the US log and wood exports, wood chip exports. Um, these are fairly constrained markets with the trade barriers recently put into place by China in twenty twenty five. Our primary trade partners are now Canada, Japan, and Vietnam. And given this concentration, we remain fairly vulnerable to significant price deflation when any of these markets tighten. When looking specifically at USMCA, You'll find that Canada is an importer of hardwood logs and chips, and an exporter of softwood lumber and other wood products, while the US exports Finnish lumber and other wood products to Mexico. That's about twenty-four percent of our domestic production in the United States. Good policy can help support the sector and improve market stability for our uh landowners. We would point you in three three um three main areas. First of all, energy markets. Fixing the definition of woody biomass and the renewable fuel standard to ensure that low value and residual quality wood are moved into energy markets uh is is free to the federal government and is an immediate uplift for uh landowners and for mills in the United States. Second is housing policy. Housing starts drive lumber demand. NAFO supports the House-passed twenty-first century Road to Housing Act and we hope your Senate colleagues join you sh soon. And finally, trade policy. Fair and enforceable trade rules are critical, as are the removal of the non-tariff barriers, both sanitary and phytosanitary, and then tariff support for domestic manufacturing operations. The United States should be viewed as a woodbasket to the world. We operate under the highest sustainability standards and have more timber than we can um sus and more timber than we can process domestically. And unfortunately, year over year, trade data shows that we are actually being reducing our exports and not increasing them, and we'd like to see that changed. I'm gonna point you to my written testimony on some other other areas of trade, such as China, India, and the European Union, but focus primarily on USMCA. For the USMCA, um there's a bit of a quirk for us, at least we view it as a quirk, in chapter ten, which is one of the um adjudicatory uh chapters. used to be chapter nineteen in NAFTA for those who are interested, we would ask that you consider uh eliminating chapter ten and give it a really hard look. It was originally envisioned as a temporary provision while the WTO was being stood up. In our view, chapter ten is obsolete, but can be used to drag out disputes, and has become a little bit more political than adjudicatory lately. Uh And in sum, NAFO is committed to being a resource for this committee as you work through these issues we believe that with the right policy support America's forests can be an even greater engine for rural prosperity nature and climate positive outcomes and national economic strength thank you and look forward to your questions.

Mr. Solomon, thank you so much for your testimony. Mr. Pula, please uh Begin when you're ready.

Thank you, Mister Chairman, a ranking member, Craig, members of the committee. My name is Dave Puglia. I'm the President and CEO of Western Growers. Western Growers mem members produce, pack and ship fruits, vegetables and tree nuts from the Western s United States, but our members operate throughout the United States and many also operate abroad. In total, our members account for roughly half of the f- annual fresh produce grown in the United States. I'm very pleased today to be able to provide testimony from our perspective, uh, of the perspective of our members regarding the review of the US, Mexico, Canada trade agreement. First, maintaining tariff-free access. Canada and Mexico rank first and second respectively in terms of exports, and represent roughly two-thirds of all global US fresh produce exports. Our three markets have been integrated for so long now that many of my members speak about their sales into Canada and Mexico the same way they speak about sales within the United States. Western Growers members thus support maintaining tariff-free access in North America. While there may be some ex exceptions tied to trade adjudications or other specific cases the general rule should be duty-free access for produce between our countries Western Growers also urges that the United States and its partners affirm that USMCA's framework and tools should be the primary vehicle to address trade issues between the signatory nations. We urge the administration to conclude this work quickly in order for trade flows to normalize and for trade tension to abate. While some of our products were temporarily placed on Canadian retaliation lists last year, just as critically, the trade tension between our countries has resulted in Canadian consumers, and by extension Canadian retailers, looking to diversify away from American produce. While Western Grover supports the continuation of a free trade agreement with our North American neighbors, we also believe improvement should be made to USMCA. As members of this committee know, growing and harvesting fresh produce requires a huge amount of human labor. Indeed, labor's share of the cost of production is nearly forty percent for fruit and vegetable growers and can be even higher for some. Moreover, average hourly earnings of US ag workers have greatly outpaced wage inflation in recent years. Given this reality, one of the biggest persistent disadvantages US producers have when competing against imports is the disparity in labor costs and standards. Western growers previously raised this as a top issue during President Trump's first term. Ultimately, significant labor reforms were enshrined to provide primarily addressed Mexico's comparatively lax standards. This included wage increase commitments and pathways for signatory countries to sanction each other for violations. We note that there have been successful changes to Mexican labor laws and positive results for certain sectors sis since USC MCA came into force. Nevertheless, there continue to be barriers in place for the promise of UMCA to be fully fulfilled. Mexican government oversight remains underfunded and various budget reductions or reallocations have challenged the rapid and full of the promised labor reforms. So we support efforts to reinforce and build upon USMCA's labor visions, particularly as it relates to wages and the worker protection laws. Doing so will not only promote better conditions for Mexican workers, but also foster fairer competition with the United States. Regarding bankruptcy challenges, among the key challenges in perishable ag trade across North America is the issue of reciprocal and forcible mechanisms to protect fresh produce growers against non-payment. In United States, Congress long ago provided a trust mechanism as part of the perishable Agricultural Commodities Act which grants fresh produce shippers first priority creditor status in the event of a buyer bankruptcy. In twenty twenty four, Canada adopted a similar mechanism, we would urge that in the USMCA review uh that Mexico be asked to adopt a similar mechanism to provide equivalent protection for exporters of fresh ag commodities. Such a tool would establish trilateral safeguards ensuring fair and secure trade access. We also called out the need for enhanced food safety provisions, uh as the chair noted. We have the most rigorous standards in the United States, respect to the food safety and inspections, uh however, uh we don't see the same commitment south of the border. Because of our concerns about foodborne illness, the US government has increased government inspections of domestic farms, and there has been a boost in private investment by the producers themselves in enhanced food safety systems. Food safety compliance, though, cannot stop at the border. In twenty twenty one, roughly sixty percent of all fruit consumed in the United States was imported, and nearly forty percent of all vegetables, with Mexico being the dominant exporter. USMCA renewal presents an opportunity for the United States to ensure that food safety oversight and standards are as vigorous in Mexico as they are domestically. Uh, Mister Chairman, uh, we appreciate the opportunity to provide these and other perspectives on renewal of the agreement. I, and again, would urge that, uh, USMCA be continued but with important changes to uh rebalance the uh the the state of play between our our our three countries. Thank you.

Ms. Boyer, thank you so much for your testimony. Uh, Mr. Beier, uh please begin when you're ready.

Thank you, Chairman Thompson, Ranking Member Craig, and members of the House Agricultural Committee. It is an honor to join you today to testify on behalf of the American Soybean Association regarding USMCA. As Ranking Member Craig Mentioned, my name is Jamie Beier. I farm with my husband in Minnesota and South Dakota, where we grow soybeans, corn, sugar beets and alfalfa. I also serve as a member of the executive committee, which for ASA, which represents US soybean farmers across thirty soy-producing states. The US soybean industry has a profound positive impact on the US economy, with the entire soy value chain generating an economic impact of one hundred and twenty-four billion in twenty twenty five. However, the trade uncertainty plaguing our industry this marketing year highlights the importance of stable long-term trade relationships for US soy. Soybeans are the largest agricultural export in the state of Minnesota and the US at large. Robust international trade is a top priority for ASA, and we worked together with the US Soybean Export Council and the World Initiative for Soy in Human Health to continue operating and opening new global markets while maintaining long-term export customers. According to the Agricultural Coalition for USMCA, which includes nearly fifty US ag groups, including ASA, agricultural and seafood exports under USMCA generated a hundred and forty-nine billion in economic output, supporting nearly half million US jobs and thirty-six billion in US wages. Since the USMCA was enacted, value of ag exports to Canada and Mexico has increased by forty-seven percent, compared to only eighteen percent for the rest of the world. For the US soybean sector, the importance of USMCA cannot be overstated. USMCA has provided stability and predictability for integration of North American agricultural markets, especially through the guarantee of duty-free treatment for soy and soy products. In the last complete marketing year, Canada and Mexico together accounted for four billion in exports, or just over thirteen percent of total soy complex exports. In addition to this, Canada also remains the top export market for biomass-based diesel, a key value-added market for US soy. USMCA upgraded Naphtun several important ways, particularly through the inclusion of a strengthened chapter on sanitary and phytosanitary measures, which builds on the rules that already apply part of the World Trade Organization's SPS agreement. The revised agreement also included a novel section on agricultural biotechnology that preempted disruptive trade trade barriers stemming from the use of genetically engineered traits. Both additions modernized the agreement for US agriculture. ASA's top priority in the five year review of USMCA is the wholehearted preservation of the trilateral agreement between the countries that maintains the comprehensive duty-free access of USMCA, the WTO plus SPS chapter, and an effective dispute settlement mechanism. We support a full sixteen year extension of the current agreement, and do not advocate for major changes to existing provisions of the agreement. USMCA is critical for the US soybean sector and should be continued without creating disruptions or additional uncertainty. However, there are minor adjustments to USMCA that the three parties including adjustments that help the agreement better facilitate agricultural trade. These recommendations include setting maximum residue limits more effectively without undermining the effectiveness of regulatory approval processes, and harmonizing grain inspection across the three parties to minimize transportation delays and support efficient agricultural shipping. These small improvements to USMCA would benefit agricultural trade and prevent additional barriers to trade. Again, ASA strongly supports a full sixteen year renewal of USMCA without delay, as Soviet farmers continue to face a challenging economic landscape. Failure to re- renew USMCA would be catastrophic. Maintaining free, open, rules-based and fair trade with North America is critical for the continued success of US agriculture. USMCA in many ways is the gold standard trade agreement. President Trump negotiated this agreement overwhelming bipartisan majority supported it, and entire industries, companies, farmers and families depend on it. Thank you again for the opportunity to testify on behalf of US soybean farmers ASA appreciates the committee's focus on the importance of USMCA renewal to the ag industry I look forward to your questions.

Mrs. Meyer, thank you so much for your testimony. Mr. Chum, please begin whenever you're ready.

Thank you, Chairman Thompson. Ranking Member Craig and members of the committee for the opportunity to testify today. My name is Michael Schump and I am the Senior Director of International Affairs at the Meat Institute. I am here today to underscore the US meat industry's support for the US-Mexico-Canada agreement, and to respectfully request that members of this committee work in consultation with the Trump administration to preserve the agreement's benefits for American agriculture. The Meat Institute is the US's oldest and largest trade association representing packers and processors of beef, pork, lamb, veal, and processed meat products, and Meat Institute member companies account for more than ninety-five percent of US output of these products. The US meat industry supports more than three point two million jobs, providing two hundred five billion dollars in labor income, and generates nine hundred twelve billion dollars in total sales. International trade is particularly vital for the long-term strength and growth of the US farm economy. In twenty twenty five, U S meat and poultry exports exceeded twenty-three billion dollars, and exports to Canada and Mexico accounted for eight billion dollars of that trade. That represents thirty-five percent of our total U S meat and poultry exports. U S MCA has fostered an integrated North American meat industry that has created opportunities for U S meat exports to flourish worldwide and for American agricultural producers workers and consumers to thrive. It is the world's gold standard trade agreement, eliminating most tariff and non-tariff barriers on US meat and livestock products, and has yielded a predictable, transparent trade environment for American businesses, rural and agricultural communities, and American workers. In twenty twenty five, Canada was the US's fourth largest export market for beef and pork by value, and the second largest market for our poultry exports. Canada is the top market for US processed pork products like bacon, ham, and sausages, which boosts the US pork industry's revenue. while offering protection against volatile demand for these products in markets like China and Southeast Asia. Meanwhile, Mexico was the US's third largest beef export market by value, and the top value destination for US pork and poultry exports in twenty twenty five. Mexico is a key market for US beef and pork variety meats, products like beef tongues and pork jowls, which find stronger prices and consumer demand outside the US. Beef exports to Canada and Mexico added ninety-one dollars, in value per fed head, and pork exports to both markets added more than twenty-eight dollars per market hog in twenty twenty five. Maintaining this robust U S meat trade with Canada and Mexico is crucial to reclaiming America's agricultural trade surplus. Walking away from or significantly undermining the agreement would drive up the trade deficit, depress wages, spur increased processing capacity in Canada and Mexico to the detriment of U S agricultural producers, and raise costs for American consumers. Canada and Mexico are also leading suppliers of livestock, beef, pork, and poultry products to the US, illustrating the dynamic nature of the North American packing and processing economy. Imported products from our USMCA partners contribute to the resilience of the US food supply chain, complement rather than displace domestic production, and moderate inflationary pressures driven by strong demand. In fact, imports from Canada and Mexico generate three point four billion dollars, for American cattle producers and meat companies. Renewing USMCA is also imperative to our national security. The integrated supply chains across North America reduce dependence on adversarial countries for critical food and agricultural inputs, and have made the US less vulnerable to geopolitical disruptions that could threaten our own economic and security interests, including our food supply. USMCA prevents competitors and adversaries from siphoning off share that has been cultivated for decades by American farmers and ranchers. Thanks to USMCA's promotion of science and risk-based trade, strong consultative and dispute settlement provisions, and enforceable access commitments, the US meat industry is not subject to excessive and unwarranted regulatory regimes. USMCA ensures that within North America, US exports and American farmers, ranchers and businesses face the fewest regulatory barriers and enjoy the most unfettered access to the Canadian and Mexican markets. When issues do arise, the agreement's consultative provisions are appropriately designed to adjudicate disagreements and crucially enforce decisions to guarantee compliance. No other trade agreement can boast the same success. I appreciate the opportunity to provide this testimony and stand ready to work with you to support the preservation of the USMCA for the benefit of the US meat industry and the broader American farm economy. I look forward to taking your questions.

Mr. Trump, thank you so much for your testimony. And Mr. Harrington, please begin when you're ready.

Chairman Thompson, thank you, thanks to Ranking Member Craig and the distinguished members of of this committee, um for this really important opportunity to talk about USMCA's impact on American agriculture. We at the US Chamber are unabashed supporters of USMCA, because the agreement has proven itself indispensable to US businesses, farmers, growers, producers, workers and consumers. More than thirteen million American jobs depend on trade with Canada and Mexico, and the USMCA has fostered US economic growth in a manner that supports many additional high-wage positions. US manufacturers export more made in America goods to Canada and Mexico, than they do to the next twelve largest US export markets combined. Canada and Mexico are the top export destinations for more than one hundred thousand small and medium sized American businesses including many family farms and growers. which benefit from the USMCA's first of its kind provisions catering specifically to 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 US industry and manufacturing, many of which are unavailable from domestic sources at reasonable prices, or in sufficient quantities. Indeed, no sectors embody the success of USMCA more than food and agriculture. Canada and Mexico are the destinations for a full one-third of US ag exports, totaling fifty-nine billion dollars annually. Canadian and Mexican foreign direct investment in the US, uh in US food sectors, uh totaled seventeen billion dollars in twenty-twenty-four, up more than twenty-five percent since USMCA's entry into force in twenty-twenty. Best-in-class sanitary and phytosanitary rules have helped ensure transparency, information sharing, and science-based decisions. on which US food and ag interests rely in all three countries. And no sector better exemplifies the deep intertwined supply chains and co-production which have become true hallmarks of the USMCA's efficiency. Canada and the US boast deep intra-industry connections that support trade within sectors and products such as grains feed beef and pork. Mexico and the US enjoy a complementary trade relationship that sees grains, oil seeds, and meat flow south while vegetables and fruit that the US doesn't produce in the winter, or in sufficient quantities, flow north. As the joint review process advances, the chamber's priorities are straightforward. First, maintain and strengthen the trilateral rules of the USMCA that support jobs and enhance North American competitiveness. Second, provide certainty and confidence to investors and producers by completing a transparent, expeditious, and orderly joint review. And third, secure a renewed commitment to full compliance with the agreement and enforce the terms when compliant compliance falls short, including in the food and agricultural sectors. My colleague Michael mentioned that Canada is falling short on USMCA compliance and implementation on 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 US is in violation of the US's USMCA's core commitment to maintain tariff-free trade within North America. Section two thirty-two tariffs on steel and aluminum in particular have adversely impacted prices of products ranging from farm equipment to food and agricultural packaging. Indeed, today's hearing coincides, as you mentioned, Mister Chairman, with the with the release of the Purdue report this week, which we find uh extremely instructive. US ho- households uh s save an estimated seven hundred dollars annually on food costs and today's dollars equivalent to roughly seven percent of household spending. Food spending, I should say, thanks to USMCA. Every one percent reduction in food tariffs is associated with an average two and two point eight percent 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. I will close by echoing the message conveyed in a bipartisan letter. to the US Trade Representative last November by over one hundred members of the House of Representatives, including many of you on this distinguished committee. Quote, " USMCA was truly a landmark agreement for American agriculture when it entered into force and its positive impact on US agriculture has yet to reach its maximum benefit." At a time when economic challenges threaten the livelihood of family farms, producers need certainty, provided under the USMCA, more than ever. End quote. The US Chamber could not agree more with those sentiments, And we will continue working closely with all of you to ensure that the US 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.

Mr. Harrington, thank you so much for your testimony. At this time members will be recognized for questions in order of seniority, alternating between majority and minority members, and in order of arrival for those who joined us after the hearing convened. Uh, you'll be recognized for five minutes each in order to allow us to get to as many questions as possible. And I now recognize myself for five minutes. The US dairy industry has faced persistent challenges from Canada due to their unwillingness to implement their tariff rate quotas, in a way that allows full market access for US dairy farmers. In two thousand twenty-five, the US access negotiated under the yogurt and buttermilk quota was four thousand one hundred and thirty-five metric tons, but only three hundred and eighty-two metric tons were actually filled, representing just nine percent of the utilization Canada had already committed to. Uh, given the uh challenges with Canada, what uh specific outcomes is the US dairy industry seeking to create a more fair and balanced trade agreement with with Li- with Canada? Mr. Licky?

Yep. First off uh Chairman Thompson, I'd just like to acknowledge your leadership with the Whole Milk for Healthy Kids Act. Uh we as participants in the industry see that as such impactful legislation, not only to our farmers, our industry, but also just ensuring the continued nutrition uh access for our children, and nutrition that tastes good in our minds. Uh specific to your question, uh while we see that there are opportunities to improve upon what was negotiated as a part of the USMCA, I I think one resolution that comes top of mind is for the quota that was given is to allow the access and full use of that quota and to provide more enforcement for the non-use of such quota.

Well, thank you for that. Mister Solwin, Mister Solwin, your testimony talks about US Canada softwood lumber dispute and discusses industry interest in addressing the dispute resolution process outlined in chapter ten. You know, walk us through the current state of the conversations and what you expect to see as it relates to USMCA.

Thank you, Mister Chairman, um currently the USMCA chapter ten dispute settlement system is a panel process that that seats uh three members sometimes there are three from Canada sometimes, or excuse me, sometimes there are two from Canada, one from the US, sometimes there, two from the US, one from Canada, but what that results in is that the panels uh are often more political than they are um adjudicatory, and they can compel federal agencies to change the manner in which they enforce US laws without a meaningful appeals process. The system is also incredibly slow and has been the source of significant delays um in this particular dispute. Uh the delays um to date are are we're around ten years in now and The United States has collected close to eight billion dollars, but the administration is unable to liquidate these funds into the US Treasury until the chapter ten disputes have been completed. We don't even have panels seated for many of them. Um so we have submitted comments to USTR and have engaged with USTR directly on this request to change chapter ten.

Alright, thank you very much. Uh, Miss Myers, in your testimony you discussed presidential decrees signed by former Mexican President, Andres Manuel Lopez Obrador. Uh, this decree called for a phase-out of genetically engineered corn, as well as a phase-out of glyphosate despite a lack of scientific evidence to support these decisions. This policy would have been harmful to many US and Canadian farmers. How how did USMCA dispute settlement process serve as a mechanism to resolve this conflict? between the US, Canada and Mexico.

Thank you for the question, Chair Thompson. Uh, as a s- as a corn grower, I am aware of those events, as we are in the industry. It's my understanding that the US at first consulted with Mexico with no resolution, and then was able to request trade dispute panel to deal with the issue and that Canada supported that initiative. The panel convened, it was able to review scientific evidence, legal arguments, and written testimony, and was able to come up with a plan for compliance with Mexico to have that issue resolved in a relatively timely fashion. So what we have seen in that sort of example is uh despite prior testimony, we were able to move this issue out of the politi political arena into a rule-based legal process. that utilized an independent panel and that supplied consequences if the country violated the commitments, and that the trade agreement becomes a path to compliance because there's that risk of losing the benefit of all those beneficial terms in the in the agreement.

Well, thank you very much. I'm gonna yield back to what few seconds I have left. Now recognize the distinguished General Lady from Minnesota, the ranking member, for five minutes.

Thank you, Mr. Chairman. Uh, Miss Beier, thanks for being here with us today. You know better than anyone how resilient Minnesota soybean growers are. But I also know that the last eighteen months have been incredibly challenging.

Thank you.

In ASA's comments to USTR on the importance of uh of USMCA, it concluded by saying failure to renew USMCA would be catastrophic. Given the market loss in China and the growth of Brazil,

Thank you for the question, Ranking Member Craig. I uh you know, soybean wouldn't choose to be in the spotlight, as they have for the past eight years. Um it's brought a lot of awareness to how our industry operates and our reliance on the export markets. So UMCA for us is kind of a shining star because it provides baseline export market facilitation but also is an example of how we can grow the industry under a trade agreement. So in contrast to sort of the things happening with China where we're maintaining quota levels and maintaining trade, we've been able to successfully grow the markets into Canada and Mexico, so two times the exports over the life of NAFTA and USMCA to Canada and four times into Mexico. So we consider it a a big win and um it's very useful for us.

Thank you so much. Um, Mister uh, Shamp, in my state of Minnesota, turkey and pork producers are extremely dependent on trade across the northern border with Canada. If USMCA were not renewed, how would livestock supply chains be affected? Uh what would it mean for livestock processing, along with producers in my state, in the cost of production?

Thank you for that question, Ranking Member Craig. Uh so as you know, USMCA has underpinned the growth in a of an extremely integrated North American meat and livestock industry. That's valued at over sixteen billion dollars when you include all of our products. And so, livestock typically from Canada and Mexico, live cattle, live hogs from Canada travel across the border multiple times often. Um that live s those live stock imports help support operational capacity for American feedlots as well as for meat and poultry processing companies. And then the meat that is produced from those companies is then either shipped back to Canada and Mexico, exported to the world, or shared here domestically with our consumers. And so if we were to d disrupt USMCA, we would disrupt those li those critical supply of livestock imports, as well as the meat that comes from those products.

Thank you so much. Um, Mister Harrington, a recent study by Purdue University found that the pass-through from tariff reductions under NAFTA and continued under USMCA are responsible for saving US households roughly seven hundred dollars in grocery cost every year. Families are already struggling to afford

Thank you so much. Uh, Ranking Member Craig, uh, thank you for recognizing the Purdue study, we agree with it, its findings are incredibly important, um underscoring USMCA's USMCA's support for uh affordability and um at the end of the day we believe it's consumers that really do benefit most from the efficiencies uh of of the agreement. Um yes, in that study it it also indicated that for every uh one percent reduction i in tariffs you see a two point eight percent savings h and household savings rate on food related uh costs. It's most beneficial to low income consumers because obviously low income consumers spend a greater proportion of their budgets, um a on on on food products. And exactly to your point, if um the study also shows conclusively that if we were to lose uh d duty free access and all the benefits that USMCA provides consumers, uh household goods uh specifically in food and agricultural products would would rise. There's no question about it. Thank you.

Well I appreciate that very much, and again thank you to all of our witnesses. Um we know how important the renewal of USMCA truly is. And with that, Mister Chairman, I yield back.

Gentlelady yields back. The chair now recognizes himself for five minutes. And I too wanna thank our witnesses for being here today. USMCA expanded market access for US agriculture. including for products and animal by-products that do not hold the same level of demand in domestic markets. Mister Harrington, to what extent do these export opportunities contribute to profitability and efficiency for producers and ag businesses, and what would the economic consequences be if these markets were reduced or lost?

Thank you very much Congressman. Um in a in a word, if we lost these benefits it would be devastating to American agriculture and specifically to producers, processors, growers, and farmers. Um, starting with the fact that uh more than a third of US agriculture exports go to Canada and Mexico. Um, beyond that, it really what we've seen, what duty free trade and the certainty of the agreement have provided are these incredibly integrated supply chains that are pr that are producing um opportunities uh for for producers and growers and farmers and processors in this country based on um inter-company trade from Canada complimentary trade from Mexico. Um these create and we have uh a lot of partners uh especially in American Southwest which would talk about the jobs that these create in the US, the complimentary trade with Mexico creates uh tens of thousands of of jobs. Um same thing on Canada because of the degree of inter- inter- uh uh company trade. being so strong and those those uh supply chains being so strong. So um abs absolutely I mean your your question goes right to the fundamental um importance of of preserving this agreement because it would be very damaging, if it if it were to go away.

Mr. Chum do you wanna touch on that from the livestock perspective, selling those pieces and parts and interesting things?

Yeah yeah absolutely. Thank you for that question Congressman. Uh so as I mentioned in my opening testimony trade with Canada and Mexico, return at ninety-one dollars per head for cattle producers, and twenty-eight dollars uh for our pork producers. So maintaining that trade is critical from that perspective. But we also export to Canada and Mexico high value cuts, and as as well as uh processed products in in terms of our pork industry, to Canada and variety meats to Mexico that don't often find demand in other markets. And all of that maximizes carcass value for our producers. Uh the one other thing I wanted to mention on this is there's the unintended consequence of leaving USMCA is that Canada and Mexico might then look to other trading partners and increase their own processing capacity that would hurt and harm our producers workers as well as consumers in the long run.

In my part of Oklahoma the cattle industry is playing a key role in offsetting poor commodity prices and helping many of my constituents remain operational so how does the USMCA contribute to the profitability and efficiency uh for producers. Continuing with your last point.

S so yeah, so the agreement like I said w it helps to maintain strong livestock trade across North America. Uh and so if we were to leave that agreement, what we would see is that trade disrupted Canada and Mexico keeping more of their livestock within uh their countries, as well as our producers not being able to have to run it. full capacity here within the US. You know, some of the livestock we get from Mexico and Canada go for feeding operations or direct slaughter and so, we would see areas of the country not be able to have feed lots operate at their full capacity as well as our meat companies would would struggle to have that stable supply of consistent animals uh for to then produce food that is sent both here to consumers and exported around the world.

Switching gears, uh Ms. Buyer, your testimony mentioned the importance of the biotechnology provisions of the USMCA. What do these provisions mean for farmers when investing in new soybean varieties?

Thank you for the question. Um, it takes, we've been told, thirteen years for a trait to be identified and to end up as a seed on a farm. And so the pipeline for the development of technology is always a decade old. And that has to do with our regulatory standards, our safety standards in the US. USMCA helps us capitalize on some of those efficiencies between the countries, so we're not stacking those sorts of processes that we can recognize each other's efforts in that. And then also it contains commitment to finding pathways for new technology, so that that doesn't get bogged down by politics or rhetoric, that we have a a commitment to make sure that we're continuing to work on regulating new traits as well.

Thank you. My time has expired. My time is up. The chair now recognizes the gentleman from California, Mister Costa, for five minutes.

Thank you very much, Mister Chairman, and uh I think it's important that we hold this hearing as negotiations are going on as we speak with the USMCA. As I say all the time, food is a national security issue. Um and uh I think California certainly proves it as a third generation farmer. Clearly I know firsthand the challenges that we face. We're the largest agricultural state in the nation. Uh, we exported uh twenty-three point eight billion dollars in farm products, about forty-four percent of what we grow in California. They are such uh crops as almonds, pistachios, dairy, wine, walnuts, tomatoes, rice, grapes, strawberries, and citrus, just to give you a bit of the diversity. Uh, I we think they're special. I'm not sure uh w we have the communication problems when gro people go to the grocery store, they don't go to the specialty crop aisle. Um but that's another matter. But people are hurting in farm country. Bankruptcies are up, and this is something that is so critical, as I go home every week to talk with my farmers, ranchers, dairy men and women. Uh President Na- uh Tom Trump took NAFTA one and and uh upgraded it. Needed to be do done. Bob Lighthouser was very effective in that effort. Put a new label on it, called it, uh USMCA, the best greatest trade agreement ever known to mankind, I think I remember when he signed it in twenty twenty. And and that maybe, but the fact is is that it is an important tool between our borders to the north and the south countries that we've had long-term relationships with. For the life of me, I can't understand why we're not using that in the five-year review period to deal with the differences, as opposed to insulting comments like a fifty-first state and other such uh tactics that I don't think help uh the process. We need a deal, we must get a deal, and it must be trilateral and enforceable and dependable. Farmers need certainty in our marketplace and not chaos. Um, Mister Poya, um we've worked together for many years, I appreciate your good work with Western Growers and the special crops I talked about. It's the heart of agriculture not only in my district but in California. where growers compete every day in the North American market. Can you share a bit about the Perishable Ag Commodities Act and why it's important for our industry and why it should be a part of the USMCA discussions with Mexico?

Thank you, Congressman Costa, for the question. I appreciate that. Uh, yes, the Perishable Agricultural Commodities Act recognizes that a producer of a perishable food product in the event of the buyer going into insolvency or bankruptcy can't pull the product back by the very fact that it's perishable. By the time the product has been delivered, the clock is running out on its uh usable life span, and uh by most standards the product's been sold, the revenue has been uh generated to to the to the retailer or to the food service company, uh and the grower of course expects to be paid. And so that's the the heart of the Parish Bowl Agricultural Commodities Act.

And we have among the highest standards in the country, uh uh California growers, correct?

That is correct.

And we want them to be strong and consistent oversight. Can you give us one or two examples of imported food safety oversight enforcement that should be improved? You talked a bit about it earlier, and how the United States could use USMCA to secure that.

Yes, again, thanks for the question. Very briefly, I'll I'll put it in this context. In twenty twenty three, the USFDA conducted eleven thousand domestic inspections of produce operations, only fifteen hundred foreign inspections, even though we have uh a very significant share of fresh fruits and vegetables coming from abroad. Uh I could show you a a a case of disparity between an American producer of a fresh produce product and a Mexican producer the same product in which case the the American producer was subject to much more rigorous standards, much more rigorous testing um and follow-on activity from the FDA while the Mexican producer was not.

And oftentimes

And so I think I think that's an area for for improvement.

the these are non-tariff. barriers that we have to deal with. And uh I think if you could submit that inf information to the committee, uh it would be helpful. Mister Schumpf with the Meat Institute, you confirmed uh the New World Screw Room, Texas. Uh USDA has confirmed a new uh detection in June third. In practical terms, what n animal health issues like the screw room happens, what does it mean for US beef uh exports?

Thank you for that question. At first I wanna just state that uh New World Screw Room is not a food safety issue and USDA does uh inspect all of our animals before they go to slaughter and all carcasses before anything would enter the food supply. Uh, what we are happy to see is USDA's focus on regionalization and zoning agreements with our trading partners. There should be no impact, according to the World Organization for Animal Health on any meat product exports. Uh, so we would expect those to continue to be exported around the world.

Thank you. My time's expired, Mr. Chairman, but I'd like to submit for uh unanimous consent a letter that I sent uh earlier um with regards to the issue of um uh naming uh names like Asagio, Feta, Gorgonzola, and their impact on the EU tech um Mexico trading deal takes effect. It's important that we get these name brand naming t things worked out and I hope that's a part of the negotiation.

Seeing no objections, so ordered. The chair now turns to the gentleman from Georgia, Mister Scott, for five minutes.

Thank you, Mr. Chairman. And uh I too, as Mr. Costa mentioned, the non-tariff trade barriers are very concerned about the non-tariff trade barriers that uh continue to create challenges for us. But uh, Mr. Puglia, uh recently a bipartisan group of seventy-eight members uh joined me in sending a letter to uh Ambassador Greer uh discussing the challenges for US specialty crops uh that are harmed by the dumping of Mexican produce uh into the United States. Um just making him aware of the challenges as we go forward with USMCA negotiations. Um members from all over the country signed this, including members from your state. What suggestions do you have and that that can help our specialty grop crop growers that are neg negatively impacted by um Mexican imports and and and again, we're we're for trade, we're for competitive and balanced trade, but it it is the dumping of product into uh our country at specifically at harvest time that is so challenging in my area.

Thank you, Mr. Scott, I appreciate that question. I would just start by saying that um I'm a little envious of some of my colleagues here who represent a single agricultural product. I have three hundred plus different agricultural products that fit within the specialty crop category. And I say that because I have to be fair to my colleagues in the special crop industry who are not at the table, we are not of one mind on your question, sir, and I think you know that.

That's correct.

Um, but, but, I think this this goes to the point that it is a v it's it's a matter of fact specific, situational circumstances. Uh, my colleagues in the Southeast have made a very compelling case, and I think that they have availed themselves of some of the of the trade tools that we have currently on the books. I would point for example to the the uh tomato suspension agreement, which was a quasi adjudicatory process that found Mexico to be dumping illegally product in the United States and as you know that suspension agreement

Can you say that again? They found Mexico to be dumping illegally into the United States.

I'm sure it was re I'm sure it was recorded.

Yeah.

Sure it was recorded. Uh and as you know the suspension agreement has been terminated, and there is now a seventeen percent tariff as a result on Mexican tomatoes into the United States. And so I think as we look at three hundred plus different crops, many of which are going across the border both ways with value add process along the way,

That's right.

uh I think you have to look at each case in a very specific way and I think it there are regional implications that vary across the country.

Tra trade is important and it needs to be competitive and balanced. Uh it it is different by region uh and it's different by the size of grower as well. Um the Western growers have many that grow on both sides of the border. Um and Mexico is a is a country that is our neighbor. Uh and we need those good trade relations. Uh Miss Swain, I wanna move to you, uh as you know uh I represent South Georgia. The uh timber prices, specifically southern pine, i is way down. Um You shared in your testimony that US forestry industry ha has experienced thirty-five pulp mill closures many of which are in my state. of Georgia, resulting in eight hundred million in annual forest revenue losses. Additionally, the U. S. pulp industry has seen an eighteen percent year-over-year decline in exports to Mexico. What meaningful changes could be made in U. S. MCA to better assist the U. S. forest industry, specifically with trade with Mexico?

Thank you, Mr. Scott. Um, I wanna be careful to not attribute the pulp mill closures primarily to trade policy because that would be a little bit misleading. The closures reflect a long-term structural decline in domestic demand for pulp and paper products so this is kind of a market pro problem not a trade problem. We don't think that USMCA is necessarily the right tool for addressing mill closures or the um

Okay.

the material that used to go to the mills which is the forest land owner issue that I represent, we think the right tool for that is fixing the re renewable fuel standard to create domestic demand for that low value um wood that these mills used to absorb and that is NAFO's top um domestic legislative priority and it costs the federal government nothing.

I uh I agree with you on the renewable fuel standard issue. I don't agree with you on some of the other comments there, but that's just differences of respectful differences of opinion. I will say this, the European Union deforestation regulation, my last uh fifteen minutes, i is is one of those non-tariff trade barriers that is extremely an extremely unfair burden that has been put on major industries in our states would you at least agree with me with that?

Uh absolutely, and I think you will see that the the EUDR uh colloquially referred to is a part of my

Yeah. Mm-hmm.

written testimony it puts a significant um compliance burden on US growers and producers.

Yes ma'am. Yes ma'am,

Uh

and my my time has exi expired, but I think it's interesting that the the European Union has exempted some of their own countries from compliance with the EUDR.

Gentleman's time has expired. The Chalr Chair now recognizes the General League of North Carolina, Ms. Adams, for five minutes.

Thank you, Mister Chairman, and thank you to the witnesses for uh for your testimony. Uh I wanna bring our attention back to the founding principles that made this agreement necessary. Uh the US uh CMA found it to be a mutually beneficial win for North American workers, farmers, ranchers and businesses, and its intent is to bring greater overall relations and unity between North American partners Canada and Mexico. Uh however we we we now entered uh a period where this deal, uh if not renewed with reforms, could do more harm than good uh because of this administration's ruthless uh trade agenda. uh which includes using tariffs or a threat of them to force compliance an and as a punitive uh foreign policy tool to achieve domestic policy objectives. Uh I represent North Carolina and North Carolina alone uh the US M MCA has supported over three hundred thousand jobs through exports. Uh of these jobs thirty six thousand and more were in my district, so I do understand the importance of the agreement. not only to the great state of North Carolina, but to my constituents in uh Charlotte and Mecklenburg. Uh the USMC is meant to be as good to our families as as it appears on paper. So um let me start with you, Mister Harrington. According to data uh from USDA, North Carolina is the country's thirteenth largest agricultural import exporting state shipping four point five billion dollars in domestic agricultural exports. abroad. In twenty twenty five Canada was the state's largest export market with eight point six billion in exported goods and North Carolina also exported five point three billion worth of goods to Mexico in the same year. So without a strong trade agreement North Carolina's exports to Canada and Mexico could face millions in extra t uh tariffs and extra taxes. So what are the potential immediate risk to agriculture supply chains and the credibility of American farmers in leading agricultural states such as North Carolina if this renewal is is postponed for the sixteen year renewal if the sixteen or the sixteen year renewal i is not ratified.

Thank you very much Congressman Adams. Uh uh absolu uh your your question hits on really some really important points. I think um certainly for North Carolina growers, producers, farmers, this the the agreement has been critical. What has also been critical is uh investment in the state from Canadian and and Mexican companies because of these integrated supply chains have created jobs. Um I think at the bottom line for us is that uh the agreement has has really created certainty in terms of establishing rules of the road that companies can depend on and that's why we're so focused on another sixteen years of renewal for this because that's the certainty that companies need.

Okay.

And that really translates having all of you put that together and it forms a virtuous circle that benefits at the end of the day North Carolina consumers and consumers across the country for with reduced cost.

Okay, so clearly the more significant consequences will manifest over time. Nonetheless, individuals in my district who depend on agricultural imports and exports must be able to strategize for their future rather than remain subject to uncertainty. Now, Mister Schrumpf, um a US farm trade is still running a deficit that's currently nineteen point seven billion in the first few months of this year, and estimated to to climb to about fifty million by the by the end of the year. For North Carolina that that national deficit hits close to home. Our state leads the country in sweet potato production ranks third in pork production, yet our farmers are absorbing high operational costs. while trying to stay competitive across borders. So uh given that record uh deficit, what specific enforcement tools should the US advocate uh for uh in twenty twenty six, a US M MCA uh review to keep Canada and Mexico committed to American agricultural markets, rather than turning to competitors like Brazil or the European Union?

Thank you for that question. I think that the the most important thing for the meat industry in the US, is to maintain USMCA as it currently is. If we were to uh withdraw or make significant changes that would undermine the agreement that would definitely give countries like China, Brazil, the European Union more access to those markets, which would undermine our ability to export there. China uh Canada and Mexico would turn to those export markets and that would only increase our trade deficit. For the meat industry, the way you turn around the deficit is to the agricultural trade deficit is to ensure a strong healthy

vibrant long-term USMCA.

Well, thank you very much. I only have uh six seconds, so I'm gonna heel back and I'll send my uh question uh to you Mister Harrington. Thank you.

Gentlelady heels back.

Thank you Mister Chair, you're back.

The chair now recognize the gentleman from Nebraska, Mister Bacon, for five minutes.

Thank you very much. I appreciate all of you being here today and your testimony and taking questions. My first question is to Mister Harrington. If you could just briefly characterize has USMCA been great for our exports and great for our economy?

Absolutely, Congressman. Um we've seen there uh uh I think a twenty five percent growth in exports over the last of the six years that USMC has been in effect. Uh it's

So it's very important for us, in my view, to get it renewed. Uh the President has negotiated quote from his feedback about nineteen agreements that they're more verbal. I think it's important that he get this on paper. We get agreements that get them approved through Congress so that we can start leveraging these agreements cuz I don't see enhancements right now on our exports, whether it's corn, soybeans, beef, pork. But are we se we we haven't seen any uptick in our exports on these verbal agreements that the President has had during these uh t these tariff negotiations. Have you seen any impact?

The reciprocal agreements, sir?

Right.

Uh the reciprocal agreements, I think I would characterize them as kind of too early to tell. Most of them are,

Okay.

you know, a a m a month or two old, a little bit more. So, I

We need to get these on paper and get them to Congress and formalize them.

Yes.

Cuz it doesn't do any good when the next president comes in and they and they s get ripped up. So we we we gotta we gotta turn this into action, in my view. Mister Light, if I may, you were talking a little bit about dairy and some of the issues there in the USMCA. Tell me if I'm wrong or if I got this right. I understand that the USMCA has provisions that allows Canada to have some protectionist measures on dairy. And and in in turn they gave us some on wood. Is that true?

I guess as it relates to the the impact on wood, I'm not aware of that.

Mm-hmm.

Um but in terms of what we were able to access, yes, we were given the ability to fulfill some quota l uh limits. However, it's just they have not been fully used at this point, and we look for ways to be able to more fully fill those quota and be able to provide

Mm-hmm.

the consumers in that country American dairy products that can fill their needs.

I'm of the view that we gotta r renegotiate this part of the USMCA, but I don't really blame Canada for what they're doing, cuz it's written into the current agreement, well, just as it is for us on wood, uh though I think this is an area that we can make better, uh with a five year extension. Uh back to Mister Harrington, if I may. With I have a lot of businesses in Omaha that I work with that represent Omaha, and they're telling me some of the anger that they're hearing from Canadian counterparts be- in response to some of the President's comments about the fifty-first state. I think our tourism's down in half. Uh they're cancelling contracts. What are you seeing at the chamber right now with our economic relationship with Canada?

Um it's been strained. It's um I think you characterized the the impact on Brand USA in Canada uh very correctly in saying it's it's it's it's uh been a very challenging set of circumstances for our brands there, our companies operating in Canada. Also um is a in some of your districts here, I'm sure you see convention visitors bureau visitors bureau numbers down from Canadian travelers. The numbers are down. So this is something that we are very focused on in trying to get this review completed and the negotiations completed cuz Brand USA is

I'm a sort of a old school Republican, a Reagan Republican. We're blessed to have a ally up north with the longest undefended border. And we we've had great trade. And I just don't see where these slights and and talking down to our neighbor uh has been helpful at all. I don't think it's gained us one one advantage. How q one last question for Mrs. Baier, Baier, excuse me, and Mr. Schumpf. How has global tariffs affected your industries? Are you seeing pushback?

Thank you for the question. Um, I think, you know, tariffs can certainly distort the market. and um prices go down a lot faster than they pop back up. So to your point, written long-term trade agreements will give us the stability to be able to make investments and endure for the next generation.

Thank you for that. I'll I'll just add that uh what's been critical for us is all of the USMCA exemptions. So for any compliant product like meat and livestock w they have been exempted

I'll just close, and I appreciate your your feedback. You know, Republicans have long supported like pinpointed tariffs. If somebody's treating us unfairly. But we haven't supported global tariffs since the nineteen thirties. It goes against Milton Friedman. It goes against Adam Smith. And I just think it it's we've learned free trade, if it's fair. i- is is the bus for consumers. And with that, I yield.

Gentleman yields back. The chair now recognizes the gentle lady from uh Connecticut, uh Mrs. Hayes, for five minutes.

Thank you. The USMCA is critically important to my state and my district. I'm from Connecticut, and Trade with Canada in Mexico supports nearly thirty thousand jobs in the district, People's and more than one hundred and fifty-six thousand jobs across Connecticut. Together, Our two North American trading partners purchased more than one billion dollars in goods and services from my district and five point five billion from the entire state each year making the USMCA critically important to our local economy. With the schedule review of the USMCA approaching, it's important to recognize what the agreement has provided for, stability. The predictability of USMCA is essential for export planning, production decisions and investments for businesses and industries relying on cross-border supply chains. But the on and off tariff tariff approach of President Trump has that the on and off tariff approach that President Trump has taken has led to price fluctuations and unpredictable market conditions. At a time when household budgets are tight, the USMCA is especially crucial as it helps support affordability by keeping North American trade predictability predictable and stable for consumers as well as businesses. My question is for Mister Harrington. You mentioned that the US Chamber of Commerce supports trade policies to make the United States the best place in the world to invest, build, hire, and innovate. How have the tariff policies implemented by this administration impacted the work of the chamber that the work that the chamber is doing to achieve these goals?

Thank you, Congressman. Duty free trade has, as you well said, has served North America and Connecticut extraordinarily well. That's that's thirty years of uh since since NAFTA came into force. Um it's the the the chamber is very clear, has been very clear um in recognising something one of my colleagues said, it is it is important to recognise that the um exemption of U of of USMCA compliant goods from tariffs has been an important step forward. Um certainly uh for for our broader economy, for processors, growers, uh and consumers and down the line, but um these the tariffs, specifically section two thirty-two tariffs that remain are incredibly damaging, both to um businesses and and um manufacturers, um hugely important and and consequential in the in the agricultural packaging, food food packaging, um forty percent of uh canned goods uh cost is represented in the the aluminum itself. So tariffs uh i f on our partners li such as Canada who provide uh eighty percent of of imported aluminum uh are are are harmful to our economy the chamber's been clear about that and so that's why with this review we are as as I said in my opening remarks, we are very clear that duty-free trade,

Thank you. Canada and Mexico are not only our top trading partners, but we make things together, creating a highly integrated supply chain across a wide ra- range of industries. For example, Connecticut imports certain types of metals like copper, nickel, titanium, zinc, and lead, making up the largest portion of its imports from Mexico, over sixty-one percent. Connecticut families rely on these imported metals to produce manufactures

Yeah, I it it

Yeah, I it it Impacts.

Impacts, that's okay. Um Yeah, I think, you know, I I mentioned in my opening remarks um, you know, the the criticality of both Mexico and Canada in pro in providing the US um, the intermediate goods, uh especially in metals, uh your your metals examples is well taken, um in that that we can't either uh supply ourselves or are not affordable uh to produce in this country. And so that's why Again, we're so we're we are s we the chamber are so focused on ensuring uh that this review leads to uh a return of of complete tariff free trade to North America.

Thank you and thank you for your answers. They're most helpful. I yield back.

I thank Junely, little Junely yields back and now I'll recognize Mister Mann from Kansas for five minutes.

Thank you uh, Mister Chairman, and thank you all for being here today. I represent the first district of Kansas, which is one of the largest agro-segurities I can wrestle with my friend here from IOF. It's the largest or or second largest, but but the point is w we raise a lot of ag products. Um we and we gotta have markets, both domestic and and foreign for these ag products. We also by the way have to have a great transportation network to get these products, you know, out of the fields, out of feed yards, um you know, to the mouths that that are gonna consume them. Um I appreciate we're having this conversation. I think we gotta remind everybody, you know, th USMC was a sixteen year deal and there was a six year review period built in, which is incredibly important because I think too often we enter into these trade deals there's no review period and so we look up after a few years, and realize we are being taken advantage of. Um so I'm glad we're having this conversation, I'm glad this review time was was built in um to prompt some some important conversations many times what happens is these non-tariff trade barriers enter in, as we all know. Um, as example, you know, non-GMO, um, corn going into Mexico, right? And so we have to have an opportunity to do a reset. And that's exactly what we're doing. I think it's healthy, it's good. I think the American farmer's gonna benefit greatly in the long term by doing this. Just a handful of quick questions. Um, first off for you, uh, uh, Mister Lichty, um, and I was at DFA a couple weeks ago, had Under Secretary for Trade, Luke Lindbergh, um, there. The, um, coldest and best milk in the country is at DFA's, um, headquarters if you ever pass them through. I know I've taken the chairman there as well. Um, n- note ahead about that, but um, my question for you, in your testimony you share that export demand now accounts for seventeen percent of total milk production. US milk production trends continue to outpace domestic consumption patterns necessi you know, necessitating exports. What percent of all US dairy exports go to Mexico and what percent go to Canada and how important are these markets to support our domestic milk production.

Well, first off, Congressman Mann. It's great to see you again. Appreciate the chance to be here with the committee today. I think in uh Chairman Thompson's opening comments he referenced that the combination of Mexico and Canada represents around forty percent of the export value, uh with Mexico being the largest of those two. Um, extremely impactful, those trading partners that we have and, you know, look forward that they create such a foundation for the growth we see in milk supply, um, that we are able to go access additional markets beyond that. But it's critically important to g- maintain that because of the over-reliance we have of our milk to those uh consumers in those two countries.

Great. And and similar question for you uh, m- m- Mrs. um, buyers regarding soybeans, you know soybeans are the top export crop in American agriculture, twenty twenty tw- twenty five five. My data says we exported sixty eight point seven million whole soybeans soy soybean meal and soybean oil to foreign markets, accounting for fifty-eight percent of production. Um, what percent of US exports are purchased by Canada and Mexico, and and how important are these markets to the US soy production?

Thank you for the question, Congressman. Uh, thirteen percent together is what we end up um exporting to Canada and Mexico at a value of four billion.

And how do that how does that compare to other export markets? China and otherwise.

So China is a nine billion dollar market. So Mexico is our number two, very important.

Okay. Um and then lastly um for you uh m- m- Mr. Schumpf on the uh on the meat side of things, meat and poultry exports um support a broad ag supply chain as we all know, whether it be fertilizer and fish bait production that rely on animal by-products or increased demand for feed crops such as corn and soybeans that go into the the you know the livestock that that consumes that and then of course, is harvested and exported. Can you explain how exports of US meat and poultry products generate economic benefits across the broader North American ag industry?

Yeah, absolutely. That's a great question. Uh, so we export twenty-five percent of our pork production, fifteen percent of beef, and fifteen percent of poultry production. So, a decent amount of what we produce is exported, but a lot of what's exported is not consumed in high levels here in the US. So that helps bring carc bring value back to producers, American farmers and ranchers who are able to send some of those

Right. Well, see my time is expiring, Mr. Chairman. Thank you all again for being here, and again I'm glad that we're dealing this review period at this very important time for American agriculture and I yield back my six seconds. Thanks, Mr. Chairman.

I thank the gentleman for yielding back his six seconds. Uh, now I'll recognize the general lady from Ohio, and Miss Brown for five minutes.

Thank you, Mister Chairman, and thank you to our witnesses for being here today. For farmers, producers, workers, and communities across the country, trade policy is not theoretical. It determines whether farmers have stable markets, whether producers can compete on a level playing field, whether workers are protected, and whether communities have a real chance to grow. We know what happens when trade policies fail to protect domestic production, from NAFTA to lax enforcement of unfair trade policies to distortion from competitors like China, too many communities experience pan plant closures, lost industrial capacity, and weakened supply chains, including the agricultural processing, transportation, and manufacturing networks that farmers rely on. And farmers are also harmed when trade policy becomes unpredictable and unstable, when broad tariff actions trigger retaliation, raise input costs, disrupt export markets, and make it harder for producers to plan the future. Either we support a rule-based enforceable North American trade policy that gives farmers workers and businesses certainty, or a chaotic hand-handed tariff policy that harms farmers, raises costs for consumers and gives China and other competitors an opening to capture market share. The USMCA was designed to be different, a stronger, fairer, and more enforceable North American trade framework that supports farmers and ranchers protects workers strengthens domestic industries and helps communities like Cleveland compete in the twenty-first century economy. So, mister Puglia? Puglia? All right. Can you share what labor enforcement tools should be strengthened in the USMCA review to ensure farmers American farmers, growers, producers, and workers are not undercut by weaker or under enforced labor standards, and how do we make sure the USMCA supports domestic agriculture production and food supply chains, rather than creating incentives for production, processing, or investment to shift outside the United States?

Thank you, Congressman, for the question. Um I'll refer to the Independent Mexi Mexico Labor Expert Board, which was created um by Congress as part of the USMCA implementation act itself. And that board has um periodically reported to the US Department of Labor their assessment of compliance or lack thereof with USMCA's labor provisions in Mexico. Um I'll just give you a couple of quick suggestions that the that that panel has made, that um that we would concur with. Uh one of their findings uh is that the number of inspectors, labor inspectors in Mexico should be increased. They found that for the population of the workforce in Mexico, pro- approximately sixty point five million workers, there should be about four thousand inspectors. There are only six hundred and sixty. Uh so that is seems an obvious area that where Mexico could step up its its uh commitment to compliance with USMCA. They also suggest expanding access to trainings for federal and state level labor inspectors on child labor protocols. to ensure the guidelines related to identifying, sanctioning, and referring for criminal investigation of child labor violations are followed. Um and then finally, I think transparency is important, uh the the panel suggests collection and publication of information on the number of routine and unannounced inspections and of course of matters referred for criminal prosecution uh and so I think those and other suggestions made by the panel would all help um remove some of the unfair um, practices taking place in Mexico that undercut American production in terms of cost labor.

Briefly, how should Congress think about USMTA not just as a trade agreement, but as part of a broader economic and national security strategy to reduce dependence on China protect farmers and producers rebuild domestic capacity and ensure communities like Cleveland are not left behind again?

Appreciate the question. Uh, uh, s so as I had mentioned on the economic side, it there's no replacement for USMCA. Our farmers, ranchers, and meat and poultry packers and processors rely on that integrated network and the meat products and livestock trade that happens across our bor borders often multiple times but Canada and Mexico either have a trade agreements with or are negotiating with China Brazil the European Union so our competitors and our adversaries if we were to walk away from uh the USMCA, it these countries would surely gain more market share at to our expense. And so our ask is that USMCA be preserved and continued so that we remain the dominant supplier in Canada and Mexico and that we continue to have unfettered access preferential treatment in those markets compared to those other countries.

Thank you so much. As we review the USMCA, we should strive for trade policies that maintain stable markets for farmers and producers. strengthen labor enforcement, build resilient supply chains, and rebuild domestic production rather than hollow it out. And with that, Mr. Chairman, I yield back. Thank you.

Yeah, all these times have expired. I recognize uh Mr. Feinsherff for five minutes.

I just wanna thank Chairman Thompson for holding this hearing today. I think it's very, very important. I wanna thank our witnesses for being here today, and I wanna thank you for your testimony. It was very impressive, and when you read through it, we understand that USMCA remains the gold standard for international trade policy and for one of the largest integrated economic blocs Mexico Canada US uh this provides us a a a road map for the most important old regional s regional supply chains uh in the world. And I'm excited I mean you know people can can criticize or whatever but to revisit and to reset this trade deal is paramount I think it's just a great thing that that we're doing. Uh so so that being said, you know, one of our areas that makes USMCA incredibly strong for our farmers is the facilitation of biotechnology and the SPS chapters that prevent non-science-based trade barriers. However, as we look for targeted improvements in these chapters, there are opportunities to better align pesticide maximum residue limits with Codex standards and further enforce barriers to trade biotechnology. Mrs., Mr. Beier. Miss Buyer, sorry. Could you quickly explain the importance of USMCA assessing critical inputs uh for your farm and the benefits of maintaining strong SPS biotechnology provisions?

Thank you for the question, Congressman. Um certainly as if if we can be more consistent among the three trading partners without impeding everyone's regulatory authorities. You know, on the farm everything we do from the start to finish is highly regulated, and so we rely on experts at EPA. Certainly we rely on experts, you know, with the FDA for our final products. And so our our systems are heavily integrated with science, and that doesn't need to be replicated. It doesn't need to be um concurrently run in other countries to accept our products. to um accept our our varieties. And so as much as these systems can be efficient, and I think one of the interesting parts about USMCA is the commitment to sharing information and transparency.

Yep.

And that's something that we benefit from.

Yeah, I I agree. I mean sharing of information, and as long as it's factual, right, I mean as long as it's research tested, research based, a- and to me that is the critical criteria for all three countries that we embrace, and and hopefully through the reset a- and through this review we can continue to go down that path. You know, Mexico is consti- is consistently one of the most important export markets for Iowa pork producers, which is why maintaining a fair and rule-based trade relationship is so important. Mexico, uh, uh, is one of the most important markets for the world when it comes to US pork. Recently we've seen Mexico initiate anti-dumping and counter-prevailing duties, AD and CVD CVD investigation. into US hams and shoulders. While every country has a right to enforce trade laws, these investigations must be based on facts, not used for political leverage. Uh, Mister Schumpf, can you discuss why maintaining a fair rule-based trade relationship under USMCA is critical for American's pork producers?

Thank you for that question. And and to be clear, we view Mexico's investigation into those pork products as spurious we don't see their um any merit to those claims.

Right.

And so but and our and our members and the industry has had to undertake ex uh expensive process to address Mexico's concerns. Uh but w in general k maintaining USMCA is going to be critical for our pork market ac access and we believe that USMCA has the consultative mechanisms in place that can address any concerns and they should be done in those ways, not through this type of an investigation.

Yep. I I agree a hundred percent, absolutely. And if I think forty percent of our our our export in in the in the pork industry goes to Mexico, I mean it's very very significant.

That is correct.

Yeah,

Mm-hmm.

so so we we gotta maintain it, but we also have to work with them uh to not have these issues come up. Uh I got forty six seconds left, quick uh, Mr. Lochne. Uh Talk about Mexico and US dairy. This is an opportunity for us. You know we've always talked about Canada, but US US and Mexico have a great dairy opportunity here. Can you just talk about that very briefly?

Yeah, I would say um it it has had a great opportunity and continues to see uh two and a half billion dollars of dairy exports are going into the Mexican market, and it's one that we want to continue to preserve and also try to offset any type of restrictions that we would have from European uh trade agreements when it comes to common cheese names.

That's exactly right. Thank you so much. Thanks again for your testimony everyone, and I yield back.

Aye, thank the gentleman, he yields back. Now I recognize the gentleman from Kansas, Miss Davids, for five minutes.

Thank you, Chairman, uh and thank you for holding this hearing. The United States Mexico Canada agreement, or USMCA, is critically important to the state of Kansas. Kansas's two largest export markets are are Mexico and Canada, and across the board, uh exp exported Kansas goods supported an estimated fifty-five thousand jobs in our state however as we've heard farmers are currently being uh just just crushed by the administration's uh tariff policies and resulting trade war. Nationally over the last crop year, farm losses have reached twenty-eight billion dollars and farm income is projected to drop even further. The tariffs have also raised costs for everyday people, including on groceries. And in the wake of um this chaotic uh tariff policy, the United the USMCA has provi has provided a a small silver lining. for folks. The agreement has provided businesses and producers with trade certainty, and market access, and, you know, amidst this chaotic and, uh, irrational trade policy that we've seen, it's estimated that US MCA's MCA's lower tariffs have saved American households, approximately seven hundred dollars annually on groceries. Um, you know, I wa- I was here when we negotiated this, President Trump negotiated and signed USMCA into law. I I was proud to vote for it. I believe it is a critically important um uh tool and that the joint review process leads to the continuation of the USMCA. Uh, Miss Beier, I was uh I'm gonna come to you first. Uh, in in the comment uh in public comment that was submitted to USTR, the American Soybean Association stated that the in- industry wouldn't survive. uh, addition an additional tariff battle with Canada and Mexico. And I'm I'm kind of gonna follow up on uh the ranking members' question to, you know, given that Mexico is the second largest importer of American soybeans, um can you give some insight into how USMCA helps to keep input prices lower? Uh, or conversely how uh how the termination of USMCA might exacerbate what is already a a volatile and and historically expensive input market, or environment, I mean.

Sure. Thank you, Congresswoman. Uh, so we're talking both on the expense side and on the the um the profit side. I think, you know, we can't we can't out we're constantly being outpriced by Brazil. So our land costs, our machinery costs, Brazil can beat us. They're at two hundred dollars less an acre. They have room for mistakes. We don't. We're on the edge, um, as far as profit goes. So, every trade agreement is important, including that with our closest neighbors. As far as inputs go, um, personally, fertilizer for my soybeans comes out of Canada, so it's a direct relationship and is, you know, sort of price sensitive, we've been seeing double digit increases in all of our inputs, is is what's affecting us today. And so even though individually each of these inputs between pesticides, fertilizers, seed, machinery are significant on their own, it's being compounded right now. And so those pressures are being accelerated. And so positive press for USMCA and review is is really important to our industry.

Thank you. Uh, two hundred less per minute, that's significant. Uh, Mister Harrington, um, I was hoping to come to you next, I um certainly appreciate the discussion of integrated supply chains and benefits for American consumers in your written testimony, uh and uh to follow on another of my colleague, they took all my questions, um but but actually it gives the opportunity uh you you mentioned um uh aluminum and the co- the increased costs when it comes to canned goods and that sort of thing I was w- I was hoping you could uh kind of expand on that with potash and template um and and and just if you could explain a bit about how that's impacted as well.

Of course. Thank you, Congressman. Congressman. Um yeah, uh in one of our biggest concerns um at the outset uh bef- before USMCA compliant goods were declared duty-free, was certainly the tariff on Padash. Uh, as w- I think we've talked about, I think um the eighty percent of the Padash we import, we import from Canada. Um, and so our farmers who who faced tariffs on the export side, um the Padash piece was a, was a huge component of their, of their costs on the input piece. And so they're getting squeezed as I think ranking member Craig well said at the outset. Um, so I think the fact that um that's exactly why we have to keep, so most potash that's USMCA compliant now is remains duty free. It has to stay that way. We have to. This is and and the same pivoting to the aluminum piece and the tin the tin plate piece, um this is a critical component in uh ag and food packaging as I mentioned. Uh it it constitutes forty percent of the cost of the product in this packaging, and with Canada as a key uh producer and provider of aluminum at below market uh prices in most cases, um when it's terra free, um that that it's a critical supplier to r to reduce cost for co producers and consumers.

Thank you. Thank you.

Thank you.

Uh, Mister Chairman, um, I appreciate the grace there, I yield back.

Sure.

Gentlemen, gentlemen, ladies' time is Uh now I represent uh recognize the gentleman from Ohio, Mister Taylor, for five minutes.

Thank you very much, Chairman, and uh thank you witnesses, more than usual number of witnesses. Thank you for your uh sacrifice and your expertise. It's great to have you with us today. Um most my district borders on the Ohio River. Agricultural trade has been and will continue to be uh vital to the farmers in southern Ohio it's my district's primarily agricultural, with a eleven thousand family farms. Uh Canada and Mexico continue to be the two largest export markets for our crops, and I anticipate that will continue with the renewal of this agreement. Our neighbors to the north and south have been consistent partners in trade, but we should always remain concerned about what would happen if we didn't have those markets. We've seen time and again that when we lose market share, other company other countries jump in and take our place, and it's almost impossible to get back. We saw that with Brazil and China in two thousand. Uh US soybean sales uh to China were almost double what Brazil sent them, but today it's uh Brazil supplying nearly seventy percent of China's total soybeans. Uh so Miss Buyer, hypothetically, where would Mexico and Canada turn if this vital trade agreement went away?

Uh thank you for the the question Congressman. You know, at the end of the day what I see when we're visiting customers is

Thank you. Mister Harrington, um the more diverse our our market options are, the better situated we will be to negotiate the best UMCA USMCA for America. Uh you have extensive experience up and down the Western Hemisphere. As we think about future trading partners, what countries do you see as most friendly and most likely to be great partners as we go forward?

Thank you for the question, Congressman. Um we're spending a lot of time focused on Argentina right now, um because of some of the reciprocal opportunities and the market-oriented opportunities. um the the market oriented reforms that Argentina is is is advancing. Um we wanna further leverage the free trade agreements that we have with, with Colombia, with the CAFTA-DR countries. Um I think we want to stabilize the relationship with Brazil. Right now it's an it's an important US trade partner as well. Um but I think twelve of our twenty FTA partners are in the Western Hemisphere, uh and that that speaks to the importance certainly to your question of of of why um why uh for US exporters, these markets are important.

Thank you. And Mister Schumpf, you've stated a few times today that any change to the US MCA would negatively impact the market for US meat producers. At the same time um producers have many uh my the producers in my district have numerous issues with the current arrangement. Is there really no uh way the US MCA can uh fairly be improved for American meat producers?

The meat and so for us the US MCA has again provided that eight billion dollars worth of trade sixteen billion dollars when you count livestock so we think that the improvements to sanitary phytosanitary measures technical barriers to trade other provisions in US MCA have really helped bolster our trade throughout North America um and we want to see all of that maintained the administration is using this as a blueprint in other regions of the world and we appreciate and support that. The one addition we would suggest for USMCA has been brought up as well on common terms, common meet names. USTR is negotiating this and other markets, and we would like to see that added as a a letter to the agreement because that would protect trade in products like bologna, salami, et cetera to um our North American partners.

Gotcha. Okay, well thank you. And just generally to the panel, i would is it fair to say that Brazil is our our biggest threat to our our participation in global trade agreements in the ag world of agriculture? Is there someone else that rivals their uh attempts to supply us as suppliers to other countries? Is it fair to uh is there not uh is that fair to say or

Well, I I'd say from a dairy perspective, I think the European Union and New Zealand are also major exporters from a global standpoint so those would be ones we'd look at from a dairy perspective.

Okay. Okay. On the m

Same on the meat side, European Union on pork in particular.

Okay.

EU on geographic indicators too, as some of the other uh members have said. Uh I think re a real problem because they export those to other trade agreements.

Okay. Alright. Well again, thank you all very much for your time. I appreciate you being here. Yield back, Chairman.

Thank you, gentlemen. Gentleman yields back. I'll recognize the gentleman from Illinois, Mister Sorenson, for five minutes.

Thank you, Mister Chairman, um thank you to our witnesses uh for fighting on behalf of America's farm families, um sincerely thank you. Um I'm proud to live in the hometown of of deer and company. Um and I hear from farmers all across the country about the incredible uncertainty that exists today, largely caused by an administration that is failing to solve serious issues in the ag sector. I hear from farmers each day about the high cost of diesel fuel that's needed in their green and yellow tractors, all because of an unwanted war in the Middle East. They can't take much more of this. In twenty f- twenty five, Trump's tariffs cost Illinoisans nearly nine billion dollars, nationwide over a hundred thirty-three billion dollars. And that means that these tariffs are now a f- seventeen hundred dollar tax on each and every household. The joint economic committee estimates that these costs will increase by forty-three percent this year to twenty-five hundred dollars. That's on top of grocery costs, care costs and insurance costs. I'll say it again. Today's farmers are being asked to just make do when all they need is certainty. China's always been our largest market for soybeans. But according to recent reports, the United States has lost fourteen point nine billion dollars in lost exports between March twenty twenty five and February of this year, as a result of Chinese retaliatory tariffs. That's why the North American market is so important. Illinois is the top soybean-producing state in the country, and number two in corn production. Ag is in our Illinois DNA. The USMCA trade agreement is a vital part of providing the certainty that we need. Mexico is the top importer of American-grown corn. Nearly thirty-five percent of all corn grown in Illinois goes to Mexico. And Canada is our top importer of ethanol. purchasing anywhere between thirty and fifty percent of all American ethanol every year. Canada and Mexico combined, purchased more than four billion dollars worth of American grown soybeans, making it the largest national agricultural export. To say this is essential is the understatement of the year. As we get closer to the July deadline, I appreciate your willingness to come to the committee Especially it's cold in here. There's a cold front that's come through, I'm pretty sure. Um, so I appreciate your willingness to be here to help us do what's right for our closest neighbors, the hardest working people in America. Uh, Mrs. Beier, I'm gonna begin with you, um you mentioned in your testimony the Chinese ten percent tariff on US soybeans, it causes our product to not be as competitive as South American grown beans. Um, without the predictability of US MCA, What does this mean for our for our soybean market?

Uh thank you for the the question Congressman, since you brought up iron. We run Green on my farm and we recently had an autonomous tractor with tillage equipment attached demoed. That's a million dollar deal.

Wow.

You know, and so when we're thinking about the types of investments we need to make on the farm versus what we want on the farm versus what we any chance at affording. You know, these are these are big decisions, and so these long-term trade agreements help stabilize those sorts of plans.

I wanna piggyback on what my colleague from Kansas, uh, Ms. Davids had said. How important is it that we bring fertilizer costs down and then we produce fertilizer in America?

Yeah, thank you for the attention to that. Um, I think it's interesting to think of both the cost of

Mm-hmm.

And so the sort of the latest round of of panic in farm country really highlighted that there's limited production, you know, scarce natural resources, and we have to be really careful at the interconnectedness of sort of the global ag economy.

I wanna open this up to everybody and my time is limited. If the USMCA were not renewed, or if it were altered or we lost the zero tariff access, you know What would this mean for our economy, in your opinions?

A third of US food and ag exports go to Mexico and Canada. I think that says it all. If we don't have that duty free access, it could be potentially devastating.

So, you all would agree that it would be devastating to our economy, our ag economy. You know, we have to make sure that uh our trading partners are dealt with fairly. Yes, we have to make sure that we have healthy competition, but our farmers and agri

Again, almost time has expired, and now uh recognize Miss Dala Cruz from Texas for five minutes.

Thank you so much, Chairman, and uh thank you to all the witnesses for being here today. My district sits on the border of Mexico. and the United States, so the USMCA agreement is of high priority for our area, not only to make sure that we include the nineteen forty-four water treaty into the USMCA agreement, but to make sure that it benefits our local South Texas uh communities. There's so many, so many things that we could talk about, but I'm going to ask uh Miss Beier, In your testimony you explained that the United States and Canada have an agreement allowing grain to cross the border without re-inspection. Um, that same agreement does not exist between the United States and Mexico, resulting in higher transportation costs for US exports. What would be the benefits of aligning the re-inspection policies across all three countries for transportation of ag commodities by freight rail.

Thank you for the question, Congresswoman. Any time there's re-inspection of grain, rail cars, it's gonna add time and delay, and USMCA, you know, one of the purposes of it is to discourage arbitrary barriers. So, in general, we'd be looking for, you know, demonstrated need for those sorts of,

But it establishes a working group, however there is not an agreement with Mexico. So what has been some of the challenges faced by uh not having an agreement with Mexico but having an agreement um with Canada?

So I'll I'll give an example of the phytosanitary. So Mexico has a a different standard for the types of foreign material that comes in, and if a rail car needs to be fumigated, it's a two day delay and seventy thousand dollars. S so that's that's an example of of the real cost.

So would be an increase uh in cost, is that What I'm hearing? Okay, wonderful. There is an important issue that is happening in South Texas, and that is the New World Screwworm, which we have found some detections in South Texas. Uh two of the three have been in South Texas, in my area. Mister Shoup, in your testimony you highlight the trade imbalances between the United States and Mexico with respect, specifically to Cattle, cattle being an important uh industry in our area. Can you explain how imports from Mexico have historically helped sup supplement the domestic herd?

Yes, thank you for that question. Um, I just want to also reiterate that uh New World Screwworm is not a food safety issue, that meat products remain safe to eat, and we um welcome the work that's being done to address the issue. on behalf of the industry, our top priority is to the health of the herd here in the in the US, and that's at and that's number one. So Mexico typically does ship one point two to one point three million head of cattle to the US uh per year. Obviously that has not been occurring because uh the border has been closed the last year due to screw worm, but most of that cattle comes and goes into feed lots and feeding operations to support American uh farmers and ranchers, and that helps i make sure that those feed lots can operate at full capacity. And so, Canada uh is the only other live cattle supplier to the US that is logistically viable. Um, so without Mexico, it's been a a really big hit to the industry.

And that being said, I only have a couple more seconds here, is USDA has taken a number of steps to prepare for the New World Screw Worm Outbreak in the United States, including a playbook uh beginning uh construction of a domestic sterile fly production in my area, Mission, Texas. and increasing sterile fly production in Mexico. What are you hearing from your members about the threat imposed by the New World Screw Worm?

Uh well, we are supportive of those efforts to address screw worms, so the sterile fly production, sterile fly dispersal, as well as other innovations that are currently underway. And our members are uh looking forward to working with you, with USDA, to ensure that uh we can eradicate New World Screw Worm.

Thank you, I yield back.

I thank the General Lady as she yields back. Now I'll recognize Mister Vindman from Virginia for five minutes.

Thank you Mister Chairman and ranking member. So uh Mister Schrumpf, I'm highly concerned, as many of my colleagues are, with the impact of the new world screw worm, now that multiple cases have been confirmed here in the United States. Two states, is that correct? Correct. And so can you just how big is the beef cattle industry in the United States?

Uh it's very significant. So we have uh so we represent the meat packers and processors of of the industry, and so uh the cattle herd is sure,

Just rough order of magnitude.

it's the lowest it's been in seventy five years, so I think around eighty something million head.

And so was that how many billion dollars is that industry? Any sense?

The total meat and and poultry industry is nine hundred twelve billion dollars, so.

Twelve. Okay. And um How does the the spread of groomer worm affect our relationship with Canada and Mexico when it comes to beef exports?

Uh th that's a really critical point to to raise there because there should not be any impact on our meat exports the World Organization for Animal Health states that there should be no impact on meat trade uh livestock trade is different so there will likely be impacts on live cattle exports and uh those will be dealt with between USDA and the different but there should be no impact on meat exports or beef exports.

And what about um the the screw worm um how do you anticipate it'll in fact it'll impact beef prices?

There so just to reiterate like I said the cattle herd is the lowest it's been in seventy five years and so there are a lot of factors that impact prices um tight supplies and strong record demand here are are one of those factors and so rebuilding the herd is going to be something that is critical. to inject additional supplies into the market. Having screw worm uh doesn't aid in that process, but that is going to be

But you don't have an uh you don't have an estimate of of potential impact on the on the price of beef.

Not an exact figure because a lot of different factors impact it.

Okay. Will will it increase? You think it'll increase the price of beef?

When you have tighter supplies and strong demand there's the potential that you might see a price increase but I I can't say specifically that it would be tight it's too

D do you have any sense of how much was spent uh by the US government for US aid programs or APHIS on on monitoring screw worm so it didn't get to the United States?

I don't have a sense of how much was spent on it, but I know that we as the meat industry support APHIS having the resources to respond to new world screw worm also from a trade perspective, since they will be negotiating with our trading partners.

Okay. And so you'd consider restoring um fired staff to APHIS as a as a strong step towards eradicating screwworms?

The meat industry uh supports uh fully funding USDA and all of the important critical functions including veterinary services, inspection services, and the like.

And um what can Congress do to ensure that the screwworm outbreak can be resolved as quickly as possible?

I'm sorry, did you say Congress, sir? I didn't, yeah, Congress.

Congress?

Uh I think working closely with USDA and ensuring that uh they have the resources necessary to be able to uh address this concern would be wonderful for the industry.

Yeah, I'll just say from my perspective, um the cut to uh programs like um USAID and APHIS um by Doge and and this administration um seems penny-wise and and pound-foolish at this point when uh we had a um screw worms were eradicated in nineteen sixty-six and now sixty years later they're back because we cut a few million dollars from a uh even ten tens of millions of dollars from a program um that affects a a twelve billion dollar industry. So um I think the sooner we can restore that funding regardless of what agency or department it falls under is is uh better for our producers. And uh with that I yield back.

Gentleman yields back. Uh now recognize the gentleman from Wisconsin, Mister Weed, for five minutes.

Thank you, Mister Chairman, what an opportune time it is to have this hearing, especially during National Dairy Month. I think the USMCA has been a great opportunity for our not only our dairy farmers, but also the producers in northeastern Wisconsin and of course across our great country. It has allowed our market in Mexico to continue to grow and easily cement ourselves as their biggest market. However, Canada continues to undercut the Wisconsin dairy industry. They have utterly failed to implement what they said. And uh the re review process uh during that, it is of the utmost importance uh that that's addressed. This is why I led a letter to Ambassador Greer last December with seventy-three of my colleagues. It was a bipartisan letter, twenty of which are on this great committee, including you, Mister Chairman, asking the administration to prioritize this exact issue with Canada. I thank all my colleagues who signed on to that letter for doing so, and I would like to submit it for the record here today. Additionally, last month I hosted a round table with farmers No, not a bitch. and cheese makers in my district on this exact topic. I wanna thank today's witnesses to allow all of us to hear more about the deal's impacts and what else we in Congress can do to ensure that Canada and Mexico follow through on their commitments to provide more certainty for our producers. I'll start with you, Mister Licti. I might end with you. We're gonna talk dairy. Um, I was proud to co-lead the bipartisan letter that was signed by seventy-four members of Congress to Ambassador Greer, last December, um urging the administration to address Canada in their in the the joint review. Wisconsin's home to world class cheese makers, who depend on fair market conditions both home and abroad. Your testimony shows that the Industrial Cheese Quota Ca- Canada committed to, under the US MCA, saw only sixty four percent utilization. Um that's over five years, correct? So which is obviously is undercutting our cheesemakers' access to the market. So my question is, what does it mean for cheesemakers' ability to compete if these issues go unresolved through a joint review?

Yes, uh thank you Congressman. And first off I agree with you, June is a great month, so I appreciate your comment there. Uh as it relates to uh specifically cheese and the cheesemakers from the United States, you know, we were given the opportunity to fill a certain volume of quota, and we've not been able to do so as you referenced. I think continuing to find ways to either enforce better use of these would be great, or to even open up the access to retailers, food service providers, or the like, beyond just industrial ingredient manufacturers, are ways for us to be able to again use what we were able to get, and allow the Canadian uh companies to live up to the commitments made.

How can we hold Canada's feet to the fire better? During this review.

So,

Specifically.

yeah, so I would say being able to provide uh greater steeper penalties for those that would un-use the f the quota the unfilled quota would be one avenue to use.

Let's talk about Mexico. I think there's a lot of wins there. Can you share any success stories with either DFA or specific farmers would be great. Um that they've had with Mexico over the last six years with with the implementation of the USMCA which has been a a big win. Um Can you tie any of those, like I said, back to farmers?

Yeah, so two and a half billion dollars worth of exports have gone to the Mexican marketplace. It is the largest export market for US dairy, so it does have a very direct impact on the milk check that dairy farms receive each and every month. Um and I would say it's not just one state, it's many states around this country that have benefited from our exports into the Mexican market.

So clearly we've talked about some some great wins with Mexico. Um Dairy farmers still have concerns. What can we do here in Congress to address what concerns are those, and what can we do here in Congress to address those concerns?

Uh we need to preserve the market access that we are able to get through NAFTA originally and then uh double down from a USMCA standpoint. I think over the last few years we've seen some movements by the European Union. to bring in some restrictive types of policies, including common cheese names. And I would say continuing to be able to provide um action from a US government standpoint to preserve again what we are able to get, including the common the use of common names.

I'm a little biased. I like dairy a lot. So sorry if I wasn't able to ask any questions of all of you. Great, great people. Thank you to all of you, and uh appreciate your time here today. I yield back.

Thank you gentlemen, gentlemen, he goes back, now recognized, the gentleman from California, Mister Carbajal, with five minutes.

Thank you very much, Mister Chairman. Uh and I wanna thank all the witnesses for taking time of your busy schedules to be here with us today. Mister Puglia, it is good to see you again. As you know very well, specialty crops account for a significant portion of agriculture grown in my district on the central coast, which is also known as paradise on earth. specialty crops just like other ag sectors depend and thrive on healthy export markets. Strong and predictable trade relationships provide the certainty growers need to make long-term investments and support jobs throughout the agriculture's supply chain however since Trump got back into office two point O our export export market and trade relationships with our neighbors have looked anything but healthy. or predictable. Canada has long been an important export destination for US agriculture products, and a key market for California growers. Mister Puglia, why is it important for your industry that the United States normalize trade relations with key partners like Canada?

Thank you, Congressman, for the question. Good to see you too. Um, I referenced in my earlier comments that Canada and Mexico represent the first and second in terms of uh rank destinations for exported fresh produce from the United States. For California specifically, uh Canada is far and away the number one export destination for our products. I think the one way to capture uh sort of the essence of your question is to reflect back on both the successes of USMCA in creating that um uh highly predictable uh stream of commerce between three countries, but also what happens when there's disruption. Canada, as you may recall, um laid down retaliatory tariffs in twenty twenty five uh uh to the order of twenty five percent in response to the IEPA tariffs that we imposed on some Canadian products and those retaliatory tariffs went among other products against fruit such as all citrus, peaches, other stone fruit, melons, uh some vegetables, tomatoes, green beans, pecans on the tree nut side, and that resulted in loss of market um quite immediately. If you look at the year-over-year data uh from twenty twenty four to twenty twenty five while those retali retaliatory tariffs were in effect, for oranges for example, the US lost thirty-four percent of its sales to Canada, Egypt and Morocco picked up the balance. If you look at mandarins, United States lost twenty-eight percent of its market to Canada, Morocco and Peru picked up the balance, and for peaches uh the US lost eighteen percent of its market during that time period year over year, Chile and Mexico. uh picked up the the market opportunity. And what we see, as we saw with China, is that when we lose a market uh for California products or Western US products in the produce sector and true for others at this table it's really hard to get that market back uh you see others come in and displace us and it's very hard to recreate that dynamic so I think that it's very very important that we see USMCA uh renewed with some important changes so that we don't go back into situation where these two most reliable trading partners feel compelled from time to time to uh slap retaliatory tariffs on US ag products.

Thank you. Uh, Mister Puglia, you mentioned in your testimony that while our reliance on imported produce has grown, so has our need for strengthening food safety compliance over foreign produce. Can you give us one or two e specific examples of how imported food safety oversight and enforcement should be improved, and how should the United States use the USMCA process to secure that?

Again, thank you for the question. Um, I mentioned earlier that in twenty twenty-three, FDA conducted ele eleven thousand domestic inspections on food safety grounds, only fifteen hundred of foreign facilities, foreign growers. Uh, we don't need to see those numbers rebalanced when you consider the fact that um so much of our produce is imported. from abroad, sixty percent of our fruit, forty percent of our vegetables, and the lion share of that from Mexico. So we specifically in our comments to um Ambassador Greer call for USDA to um stand up NFDA to stand up a more robust on-farm inspection verification system in Mexican uh operations, we don't have the same level of concern with respect to Canada, but we do with respect to Mexico. There have been cases that showed dramatically different um, approaches by the federal government when it comes to a domestic producer with a food safety outbreak versus a Mexican producer. And without going into those details, it is wildly different. And so there is an opportunity to use the MCA renewal process to bring Mexico further along so that we have a more equalized approach to food safety, which of course benefits the consumers we serve.

Thank you so much. Uh, I'm out of time. Mister Chair, I yield back.

Uh, gentlemen's time has expired, now recognize the gentleman from Pennsylvania, Mister Bresnan, for five minutes.

Thank thank you Mister Chairman, Ranking Member, and thank you to all the witnesses for being here this morning. The USMCA provides the market access that our farmers, ranchers and producers depend on every day. Canada and Mexico are among our largest agricultural trading partners, and reliable access to those markets help support farm income, sustain rural jobs, and keep American agriculture competitive. But when I talk with farmers across Northeastern Pennsylvania about trade, one word comes up time and time again, and that's certainty. Farming is a long-term business. Producers make decisions months and often years in advance about what to plant, what equipment to purchase, and how to invest in their operations. That is why certainty around surrounding the USMCA review process is so vital. It gives farmers the confidence that they need to plan ahead, manage risk, and continuing investing in the future of their farms and their businesses. When trade relationships are predictable, farmers can focus on growing their operations rather than worrying about disruptions to the markets they rely on. A clear and transparent review process helps provide the stability producers need to succeed compete and continue feeding our country and the world. So my first question is for Mister Harrington. Uh could you provide some examples of policies that have disrupted the agreements

Thank you, Congressman. Appreciate the question. Um, the US Chamber, as I think a few of you know, has been uh very focused on the issue of compliance and enforcement in this agreement. Uh, each of the three countries has work to do in this regard. Uh, we are very focused um in starting starting with Mexico. Uh I I talked specifically in the ag space about um biotechnological uh approvals, and that goes for the broader uh health space as well, approvals in uh in Mexico's agency called Cofepris. Um certainly there's challenges in Mexico on energy, which affect our companies, there are challenges uh in government procurement, and um in Canada we've talked about certainly the ag specific and the dairy uh s sector, uh the impediment there. Uh we've talked about we we have not talked about some of the real uh digital trade challenges that Canada is posing and then obviously here in terms of uh couldn't agree more with you on certainty on the on the theme of certainty and we need duty free terra du duty free trade back in USMCA to restore that certainty you're talking about for producers uh growers uh and consumers.

Uh I I appreciate the uh the term of certainty today because that's one thing we hear time and time again is knowing where the goal posts are and knowing how to row the boat towards that same common goal when you mentioned uh Mexican energy um what are some of the ideas or shortfalls is it all of D all of the above relevant to energy is it generation, is it transmission, where do you where do you see the biggest uh impotence in in actually getting more electrons on the grid?

Yeah it's a great, it's a great question, 'cause it impacts so many of our companies working in Mexico. The main issue is um i is challenging Mexico's um attempts to tilt the playing field in f in in favor of state owned actors. So you have PEMEX, you have uh CFE, the electricity provider, uh which are um have put US providers to the back of the line. So that's the first, that's the first area is is is leveling the playing field. We at the chamber have been clear that um that USTR should bring a case. We've brought this up including in the last administration, we've made the case to the to this this administration to bring a dispute resolution case. I'm I'm more optimistic than I've been that this review process because of the fifty three uh specific areas that have been put on the table that it's go that these are going to be addressed because Mexico's committed to USTR to address them, as part of the review. We'll see. We'll see.

Uh, I appreciate it. Uh, for Mr. Polia, can you elaborate on the challenges US specialty cop growers are facing from Mexican competition and please provide any recommendations that Congress could be taking uh to help offset those concerns and how they could be addressed?

Thank you for the question. Um, I I think there're there're two different sides of this coin. One is the the integrated nature of the fresh produce industry between the three countries and that includes Mexico. Many of my members produce uh their products in both the United States and Mexico, for seasonality reasons um being a large share of it. Some of it is cost of production. California, where most of my members are, is a very high cost of production state. Uh but having said that, the the linkages between the countries work pretty well, where we have called for um changes in USMCA that could help American producers uh fresh produce, vis-a-vis Mexican producers. as mentioned earlier, are in the areas of labor standards enforcement, compliance with USMCA's um requirements of of Mexico to to make good on its commitments in the labor enforcement arena. We've also suggested new provisions to upgrade Mexico's uh performance on food safety. Uh, particularly FDA needs to be more aggressive in in performing audits and food safety inspections on-site especially after an outbreak has been traced back to either a region or a

Gentleman's time has expired now. Recognize gentleman from New York, Mister Mannion, for five minutes.

Thank you, Mister Chairman. Thank you to our witnesses. Um, Mister Lichty, I'm gonna focus my uh questions towards you, and I certainly wanna look at uh Canada's dairy tariff rate quota problem, not just as a farm uh income issue but also as a manufacturing and jobs issue and I know that you made reference to this in your opening statement and your uh answers to my colleague, the Congressman from Wisconsin here. So in upstate New York we are the number one producer of yogurt and cottage cheese. Um we have major dairy organizations uh Hood and Burn, um Cayuga Milk, but also Chobani, they built major yogurt manufacturing facilities. Because in uh upstate New York we have the milk supply, we have the workforce, and we have the promise of market access under USMCA. So if Canada did fully honor its yogurt TRQ commitments, what would that mean for manufacturing jobs and the investment decisions companies are making right now in places like upstate New York?

Mm. Uh, thank you for the question, Congressman. Um a as you're probably aware, the US dairy industry has invested billions of dollars in the most recent years in manufacturing to process milk from dairy farms into high quality products including the yogurt cottage cheese and and the like that you referenced i if we're able to fulfill the quota rates that have been given as a part of the agreement that's more demand with more demand it creates more

Yeah.

opportunity to fill capacity not just to support the jobs in those facilities, But it also provides more milk that farmers can sell to those facilities, uh, especially the ones that you referenced in the State of New York.

And um the undercutting of these quotas, you had mentioned in a previous response, stiffer penalties. What would those stiffer penalties look like and would it require updates in USMCA?

I think in terms of the penalties, we're just looking for the fuller use of the volumes that were granted as a part of the agreement. And from our standpoint, just finding mechanisms to be able to get that bolder use of those volumes.

Gotcha. Thank you. I appreciate that. Um, so from what you've seen, are manufacturers having to hold back because of uh, you know, these quotas not being met?

Uh, I would say that's unmet demand, that w we from the United States aren't able to meet. Um, we are able to go find other markets when necessary, but again, from the proximity of the market, it just me makes logistical sense for us to be able to work with trading partners that are in Canada that are desiring US dairy products.

Thank you for that, I appreciate that, and we've heard from this administration that they may consider bilateral approach to the US MCA review. Mexico is obviously a critical dairy export market, but addressing Canada's dairy TRQ issues is also essential if we're serious about growing uh the dairy manufacturing industry and jobs like you had said. So, if we secure a strong agreement with Mexico, but leave Canada's dairy uh TRQ problems unresolved, what impact would that have on our goal of increasing dairy manufacturing and the jobs that come with it in places like upstate New York?

I if you look at the combination of Mexico and Canada, they are two of the most important and impactful

Thank you, Mr. Lique. Thank you, Mr. Chairman. I yield back.

General Miel is back. Now recognize the gentlelady from Illinois, Mrs. Miller. For five minutes.

Thank you, Mister Chairman, for holding this important hearing. And Mrs. Beier, I'm sure you know that Illinois leads the country in soybean production. In twenty twenty five, Illinois harvested more than six hundred and thirty-three million bushels of soybeans, which is more than what some countries produce. In my district alone, there are over three million acres of farmland dedicated to soy production. I know how important the USMCA is to soy exports, with Canada and Mexico buying roughly four billion dollars in US soy products, which is why I'm very grateful to President Trump's leadership in getting that historic trade deal finalized in his first term. Mrs. Beier, you mentioned in your written testimony that freight rail is key to the success of the USMCA. specifically as it relates to moving our agricultural products into Canada and Mexico. Can you expand on that and talk about how improved rail, trucking, and port networks can better facilitate agricultural trade across our hemisphere?

Yes, thank you for the question, Congresswoman. Our transportation system is really our advantage when it comes to moving grain,

Mm-hmm.

and in addition to soybean, You're a big corn state too, and um there's nowhere to hide with the USMCA. You know, we're covering both crops. And so it's it's vitally important that we keep these systems strong and moving, and uh we always say that's how we move the pile. We gotta move the pile.

Mm-hmm.

Um how can we improve rail trucking and port networks?

So something that we've discussed a little today is to reduce the amount of re-inspections happening at the Mexican border. That just adds cost and delay, in our opinion.

Okay, thank you, and I yield back.

Generally yield back, now recognize the gentleman from Alabama, Mister Figures, for five minutes.

Thank you, Mister Chairman, and thank you to all of the witnesses that must seat up here. Thank you to all the witnesses uh for your time and and and being here today, and your presence here today. Uh look I represent uh the state of Alabama, the second congressional district of Alabama, which is in the southernmost uh half of the state, and so uh we have a lot of farmers there. And for the farmers and workers and families I represent in Alabama, trade policy is is not a uh an abstract political issue. It directly affects uh like in many of your communities uh what producers earn for their crops their livestock uh what businesses can invest in and what families pay at the grocery store as a member of both the Ag Committee as well as I see how trade relationships affect Alabama's agricultural and manufacturing sectors, including our auto industry supply chains and the jobs that depend on moving goods across North America. USMCA has delivered benefits for Alabama. Uh those benefits uh but those benefits depend on something every farmer and and business owner values, and that is certainty. Uh producers need stable markets, employers need a reliable workforce, family need affordable f families need affordable food, And yet many are facing uncertainty from trade disputes and tariff threats to H two A labor challenges and concerns about the spread of New World's screw worm that we've discussed here today uh at length uh today's discussion is about more than just trade volumes and economic statistics it is about whether we are creating a stable environment that allows American agriculture, manufacturing and rural communities to plan, invest and compete with confidence and certainty. Over the last year alone producers have faced volatile markets, rising input costs, labor shortages, animal disease, threats, trade uncertainty, and severe weather. Farmers make business decisions months and sometimes years in advance, yet many feel that they are operating in an environment where the rules keep changing, and keep changing on short notice. And so I'm inspired, my first question is to you, it's a look over my my pitcher's head here, John Mannion. Um um the uh your testimony highlights that USMCA works because it provides certainty, clear rules, and long-term confidence for both buyers and sellers. Unfortunately, many of our soybean producers do not see that same certainty in in other export markets. Uh when foreign buyers shift their purchases to competitors and invest in new supply chains, those decisions can become permanent. Uh from the perspective of Alabama soybean farmers, how concerned should we be that market share lost during periods of trade uncertainty may never come back? Uh and what policies are needed to restore confidence in the US as a reliable long-term trading partner?

Thank you for the question, Congressman. I think, you know, following the the China trade war, we have definitely seen investments being made in our in in other parts of the world with our competitors and their ability to to deliver beans to ports. I think the strength of the US soy economy though comes in part to renewable fuels, so we haven't talked too much about that today too, but um with both Canada and and Mexico participating in those sorts of activities, there's opportunity there, there's certainly opportunity that we're securing domestically to promote those those industries, and having access to crush facilities and fuel refineries and those sorts of things are are really important for local markets also.

Understood. The do you know right off, and this is not meant to put you on the spot, but if you don't we'll take a response on the record, but how much was lost in the soybean industry with the tariff war with China, when exports dried up?

That's a good question. I I won't be able to answer that.

Okay. But is it is it fair to assume though that we're talking billions of dollars? Is that a fair assumption?

I don't know. I I billion is a big number. I'm not sure.

Uh yeah. I um I agree. Um it's it's a big number and unfortunately I think um the billions would not be in the low billions um when we get that number and I look forward to getting that data point. The point I'm trying to make is that the tariffs, I don't care who you voted for for president. I don't care who you voted for for Congress, I don't care if you identify as a lifelong Democrat or a lifelong Republican. Does not matter to me. Nobody signed up for what we went through with the tariffs, and I know our agricultural committee did not sign up for that either. It was not good for Alabama, it was not good for District two, it was not good for America, it was certainly not good for the agricultural industry which provides so much to this nation so much to this nation yet they had to take it on the chin to the tune of billions if not hundreds of billions of dollars. It was not right, not right. And something that we collectively as members of Congress who sit here on this committee and across Congress and say that we support farmers we need to stand up and address the harm that was done regardless of political party and we need to be serious about putting forth a package um that provides some relief, at least some of the relief uh to American agricultural industry. Uh that is something that I would hope that we can have all of you guys

I thanks the gentleman, gentleman yield back. I do wanna

Mm.

Just correct the wor- the record on the New World Screw Worm. It's not here because of U- USDA budget cuts. Uh USDA and APHIS have broad authority under the Animal Health Protection Act to use appropriated dollars, contingency funding, and emergency resources to respond to animal health threats. And USDA has used that authority at scale for the past eighteen months. Um, for the New World Screw Worm alone through this authority, APHIS has received roughly one point three billion dollars in emergency funding and has already obligated more than one billion to mount one of the largest animal health responses in uh in history. And so uh and uh Farm Bill one point O actually invested almost uh two billion dollars over over ten years. So uh Congress is doing its job of providing the needed uh vitally needed resources. Um uh I'm gonna I don't think Mister here uh I'm gonna recognize um Uh, Mr. uh, Messmer for five minutes. Well, I think, Mr. Harris, Miss Harris, you need additional time or are you ready?

You're ready.

I'm ready, if you want.

OK, well, um, looking over my list here. Well, I'm still gonna recognize Mister Messmer for five minutes.

Uh, thank you, Mister Chairman, and thank you, witnesses, for being here today. Uh, with most of Indiana's eight thousand melon and pumpkin acres, Formed in my district, my growers are sensitive to price distortion from imported goods. Since two thousand one, specialty crops uh imported from Mexico have grown by more than five hundred and fifty percent. Unfortunately, Mexico's harvest window overlaps or even precedes Indiana's. As a result, Hoosier producers are forced to compete with Mexican goods sold at prices that American farmers c- uh cannot reach under existing labor laws and input cost. Uh, Mister Puglia, sorry if I butchered that. Uh, given your experience advocating for fresh produce growers, how important would you say uh that the US MCA protect American markets from being saturated with cheap foreign special crops, especially during uh peak domestic harvest?

Thank you Congressman, you were close. It's Puglia, like lasagna, right?

Puglia.

The Gia's We'll make everybody Italians before we're done here.

The Gia Sala.

Um, uh very important, but as I I I may have uh uh said earlier to Congressman Scott, and and our back and forth. Um I have the uh the burden of representing three hundred different crops that fall within specialty crop category. Much of what we have to address is very situational, crop by crop. Some crops have advantages um in the marketplace where other crops would have a disadvantage. There are seasonal considerations, et cetera, et cetera. To your point though, um I think it's very important to recognize that USMCA provides a level of um enforced certainty in our trade relationships and our markets with the proviso that for any of those three hundred plus different specialty crop interests, there's there are opportunities to use section three O one or countervailing duty and and anti-dumping cases to address specific alleged harms. Case in point is the tomato suspension agreement I mentioned earlier, which dates back to the nineteen nineties. Uh the US found that Mexico had been was illegally dumping tomatoes into the US market. Uh but the by agreement of the industry suspended the the um the the penalties under the s the the the finding that uh suspension agreement was terminated by the administration last year resulting in a seventeen percent tariff on Mexican tomatoes and so I think that um fact finding quasi judicial um process is, it's a little painful, but it does yield results that are specific to the circumstance of the crop, among those three hundred, the regions that are affected differently. Uh, I'm very, very aware, spent a lot of time talking to to my counterpart uh who heads the Florida Fruit and Vegetable Association, Mike Joiner. H his members are facing a different situation than mine across many of our shared commodities and so I think that that's why it's really important that we that we focus on those tools that are available to industry uh to be able to to go to USTR, go to Department of Commerce, go to the International Trade Commission, and prove a case. Uh it's not easy to do, but it can be done.

Yeah, I think the broccoli growers in my district have felt the same challenges for Mexican product as well, so I pr appreciate that. Um, Indiana also has a vibrant hardwood industry. In fact, the the Hoosier State ranks first in the nation in in uh hardwood veneer, manufacturing and second in production of wood cabinets and counter tops. In twenty twenty four, Canada alone represented nearly half the demand for Hoosier produced wood veneer. In that same year, Canada and Mexico accounted uh for a quarter of Indiana lum lumber exports. Clearly the US MCA must be preserved, uh but but Ms. Salwan, in your testimony you described a different issue that is undermining US hardwoods. Against the back backdrop of of increasing mill closures, how serious is the threat of terra-free Russian plywood uh to the American hardwood industry?

Mike first. Uh, thank you for the question, Congressman. Um, honestly, it is substantial. Russia exports logs to China, where they're peeled into veneers and shipped to Vietnam. They're then formed into plywood, which enters the US market effectively tariff-free, despite a fifty percent tariff on direct Russian plywood imports. In twenty twenty four, nearly three hundred and sixty million dollars in birch plywood entered from Vietnam and Indonesia, by neither country having native birch trees. Uh Vietnamese plywood imports surged fifty-two percent in that single year. Uh the Department of Commerce did make an affirmative circumvention determination in July of twenty twenty-three, but enforcement has proven uh really difficult to sustain, and imports have surged again. It is a significant factor for the hardwoods industry and for hardwoods growers and we hope that commerce continues

Thank you. I I would agree with those efforts and protecting those uh this vulnerable industry is is a priority of mine. So thank you and I yield back.

Thank you gentlemen, gentlemen's time has expired, now recognize uh Mr. Davis from North Carolina for five minutes.

Thank you so much, Mr. Chair, to the ranking member. And to each witness who's here today. I have the honor of representing Eastern North Carolina where agriculture is the backbone of our economy. Would like to direct my first question to Mister Herrington. In Eastern North Carolina, our farmers tell me that it's been hard not knowing what the rules will be from one season to the next. A former financing equipment, land, and input is making multiple year bets If this joint review ends in anything short of a clean long-term renewal, such as non-binding bilateral side deals, what does that do to the ability of farmers and agribusinesses to plan borrow and invest?

Thank you so much for the question, Congressman. Um, you're really speaking to I think one of the one of the the critical themes we're focused on today, which is certainty. Your farmers, your growers in Eastern North Carolina need that certainty. This is a certainty that that USMCA certainly has supplied, and and the the s the certainty that thirty years of duty-free trade in North America has supplied. They've been able to rely on that, they've been able to invest in that. Um and they've been able to produce goods at a very competitive scale and cost for consumers nationwide. Um so that is Absolutely, uh we we wanna see uh unequivocally sixteen more years of of USMCA renewed, so that exactly your constituents, your f your uh agriculture and food producers in eastern North Carolina can uh ensure that they have that certainty to be able to continue to invest.

Uh thank you, Mister. North Carolina's the second largest hog producer state in the country, and a huge share of those hogs are raised in and around my district. Uh Mexico is the number one market for US port, over two point nine billion this past year. Walk me through, if you would, what happens to hog producers and processing jobs in a state like mine if US MCA lapses, or Mexico retaliates? How quickly would competitors like the EU, which already has agreements with Mexico and Canada,

Yeah. Thank you for that uh question. It it would have a devastating impact. So as you said, i Mexico is our top market for pork exports, and that's not just those high value muscle cuts that we send, but it's the variety of meat products. And given how China has been acting over the last several years as well, they're not the good faith trading partner that Mexico is often. And so that is a key market for a lot of those products that don't have strong consumer demand here. but they find strong consumer demand and prices in Mexico. That then returns revenue back to hog farmers and to the entire pork industry. And so that's why maintaining it is critical. To your point, if we don't, the EU and other countries that have agreements with Mexico will take our market share that we have earned that our farmers and ranchers have earned over decades.

Mister Poella. Produce grown in Mexico continues to impact US fruit and vegetable growers because of a cost to pr- of production gap. Our farmers cannot close. Um, our growers meet some of the strictest food safety, labor, and environmental standards in the world. Um, food safety should be a paramount consideration with our trading partners. In this review, how do we ensure imported produce is held to the same food safety and inspection standards American growers must meet so the playing field isn't tilted against the people that's just trying to do it right?

Thank you, Congressman. I appreciate that question. Um, the the FDA has increased its its um oversight and regulation of the fresh produce industry domestically. They've not had the same level of increased activity with respect to foreign producers. Uh, we have examples of foreign producers of a fresh produce commodity where an outbreak was traced back. And to be uh candid, very little was done to restrict ongoing operations from that producer and and continue to ship product in the United States. Similar producer, same product in the United States. Outbreak traced back, and they've gone through enormous FDA oversight, auditing, testing, change practices, uh in in this specific case I'm thinking of loss of market that has been permanent. When we have a foodborne illness outbreak in the produce industry, uh for example, uh well I'm not gonna name a commodity, but for any of our crops, that tanks consumer demand for a period of time, no matter where it came from and no matter who produced it. And so an American grower of any fresh fresh produce product um is going to suffer economically when a bad actor on either side of the border fails to perform to the food safety standards that we expect in United States. So we would hope that the administration and Congress would put a thumb on this issue in renewal of USMCA to require Mexico uh to perform to a higher level with USFDA's um um oversight including in-field inspections in Mexico.

Um thank you. Now Yilbert.

Jim, his time has expired. Now recognize Mr. Harris for five minutes.

Thank you, Mister Chairman, and uh thanks to all of you on the panel for being here today and for your perseverance. Has there a lot of committee meetings going on and I know been a whole lot of ins and outs. Um I had the privilege of reading your testimonies uh coming into this today and, and since the USMCA took effect in twenty twenty, it has helped provide stability and predictability for the America's hard-working farmers and ranchers. And while this agreement's been a significant benefit, to US agriculture, we all know that there's still opportunities to strengthen it and ensure American producers continue to realize the full benefits. So, Mister Schumpf, I did notice in your testimony you mentioned that the USMCA preserves preferential access to the Canadian and Mexican markets for US meat, poultry, and livestock products. And I wanna kinda build on that point for a moment, considering in my home state of North Carolina, it's one of the largest turkey producing states in the country, One concern that I hear from industry leaders is regarding market access for the US turkey exports to Canada. Many turkey producers across the country are eager to see additional export opportunities to the Comai Canadian market. So as the USMCA review process moves forward, what are some specific changes you believe could be made to better support the American turkey producers and expand uh export opportunities to Canada?

I ap I appreciate that question. So our focus is been on the broader meat industry and so we have not a called for major changes to the agreement because we view USMCA as it is with its strong SPS and technical barriers to trade uh provisions and the duty-free trade for most of our meat and livestock products as key to preserving. So the only additional change we are calling for on the meat industry side is to really see Canada and Mexico allow trade and products that are that bear common meat names like salami, bologna, prosciutto, et cetera, um so that the EU and other countries do not uh take our market share for that. So we're not calling for m much broader changes beyond um the current existing agreement.

Well, w in your expertise, how would greater access to the Canadian market benefit the US turkey producers and bring certainty to to their operations?

We uh s we uh we view Canada and Mexico as, again, our most reliable trading partners and that trade does provide certainty. So any additional certainty that could be provided to these producers and a additional elements that would provide more fair and balanced trade uh would be something that we would expect to see then a additional market share be uh them be able to take additional market share if that's given to them in the agreement.

Okay. And while we're here, Mister Schumpf, I'll just stay here for a moment. The US cattle herd is also at its lowest level in decades and consumers are seeing the impact through higher beef prices at the grocery stores. As ranchers work to rebuild their herd they continue to face significant new challenges including the drought and the emergence of the new world, screwworm, at the same time other segments of the beef supply chain are facing economic pressures and consumers continue to grapple with the high prices, while demand for beef continues to increase. How can we leverage the USMCA to address concerns about affordability for consumers while also supporting the efforts to rebuild the domestic cattle herd.

Um that's an excellent question. So uh first and foremost we need to preserve USMCA because if we were to walk away from it that would certainly have impacts on prices you know the duty-free zero tariff trade allows this integrated market to flourish and products move across the market multiple times that helps to reduce costs for businesses and ultimately to consumers. And so we would su- we would support maintaining that access for everyone, uh, on the - the meat and poultry side as well as on the livestock side.

Great, thank you. In the one minute I have left, uh, Ms. Beier, China recently committed to purchasing seventeen billion dollars in U S soybeans annually through twenty twenty eight I believe. And as you noted in your testimony, it remains the largest export market for U S soybeans. However, Chinese purchases of U S soybeans have declined in recent years, is China's turn to competitors such as Brazil. In contrast, how does the certainty and stability provided by long-term agreements like the USMCA influence your year-to-year planting and business decisions?

Uh, thank you for the question, Congressman. We certainly appreciate the attention to the China trade deals, um, and, you know, monitoring as those loads head their way for delivery. I think, you know, one of the disappointments for US farmers is that that that that hasn't grown as much as as we would have liked and so in contrast we find that USMCA with our partners in Canada and Mexico we've been able to grow exports to them and so it ends up being a a a positive relationship for us.

Super. Well, thank you. Mister Chairman, I yield back.

Gentleman yields back. Thank the gentleman. Now recognize uh gentleman from Illinois, Mister Jackson, for five minutes.

Thank you very much, Chairman Thompson, and I'd like to ver- give a very special thank you to all the participants today in our program. Um, I feel the same pain that you do regarding what's going on in Washington. Um, let me just share this with you. Uh, there are the times uh there are times in the moment in the life of a nation when the debate before us appears to be about economics, but I would say what's missing so far in this discussion is really is about the character of the nation, this is one of those moments. When we speak about agriculture and the future of the United States, Mexico, Canada r- agreements, we're not merely discussing trade flows, commodity prices, or export statistics, we're discussing whether America intends to keep faith with the people that feed her. We're discussing whether a farmer's labor will be honored or sacrificed to political theater. We're discussing whether economic policy would be guided by wisdom or impulse. For generation, American farmers have done what America has always asked them to do. They planted in uncertainty, they borrowed against hope, they endured droughts, floods, and market swings. They all understand. And through it all, they fed not only America but they could feed much of the world. Yet in recent years, many farmers have discovered that the greatest threat to their livelihood is not nature, it's in Washington, particularly the reckless use of abuse of tariffs. Now let us tell the truth, tariffs are sometimes necessary tools. Every nation has a right to protect legitimate strategies and our interests, but when tariffs become political weapons used indiscriminately, they cease being economic policy and become economic vandalism, because vandalism is destruction of value that someone else worked hard to create. Econ- American soybean farmers spent decades building relationships with international customers. Those relationships were not created by politicians in Washington DC. They were created by the farmers. They were created by the grain elevators. They were created by exporters and families who understood that trust is earned over years and time. Then suddenly markets were disrupted, with territory terrorists followed. Customers looked elsewhere. Competitors in South America stepped forward. And the farmers paid the bill, not the politicians, the farmer. The same story unfolded for the corn producers. Corn is woven into the fabric of rural America. It feeds livestock, it supports ethanol production. It drives local economies across Illinois, Iowa, Indiana, Minnesota, and beyond. When trade uncertainty enters the marketplace, corn prices weaken, investment slows, and rural communities absorb the shock. A tariff announced in Washington becomes a lost opportunity. In Decatur, Illinois, a political press conference becomes delayed equipment purchase in Bloomington, Illinois. A trade war becomes a family struggling to keep a multi-generational farm alive. This is the human cost of economic carelessness. Let us be very clear, this is not conservativism. This conservatism is supposed to value stability. This is the most unstable market I think I've seen in my lifetime. Conservativism is supposed to value markets. That's not what we're seeing today. Mister Chairman, conservatism is supposed to value predictability and stewardship. There's no relief for the farmers in sight. What we have witnessed too often is not stewardship, it is disruption masquerading masquerading as strategy. It is uncertainty masquerading as strength. It is economic vandalism carried out in the name of patriotism. Mr. Chairman, I would say the farmer deserves better, the nation deserves better, which brings us to the USMCA. The future of the USMCA should not be retreat. It must be renewal. The United States, Canada and Mexico together form the most productive agricultural region on Earth. Our farmers succeed not because they are isolated, but because they are connected, connected to market, connected to transportation networks, connected to customers, connected to one another. The answer is not to weaken the United States MCA. The answer is to strengthen it. We should modernize agricultural trade rules. We should expand market access. We should reduce unnecessary barriers. We should protect our farmers' interests. And we should improve transportation infrastructure at ports, rail hubs, border crossings. We should invest in agriculture, technology, climate resilience, precision farming and rural broadband. And perhaps most importantly, we should provide certainty, because capital flees uncertainty, investment fears uncertainty, and farmers cannot plan their future around political improvisation. America's farmer among the most productive people on earth. Their success success should not depend upon guessing what policy may emerge from Washington tomorrow. The purpose of government is not to create chaos. I yield back.

Gentleman yield's back. Now I'll recognize the gentleman from California, Mister Gray, for five minutes.

Thank you uh Mister Chairman, Ranking Member Craig, thank you to all the witnesses for joining us today for this important conversation. Um The other day I had the opportunity to visit with the Secretary of Agriculture.

Yes, I can.

And I asked her to imagine a fictitious alternate universe where she was given the task of harming California agriculture. I said, " What would we imagine we could do?" We talked through, well, maybe we could disrupt the labor market. Perhaps we could have chaotic tr tariffs that we announce one day and retract the next and announce again. Uh perhaps we could increase fuel costs and input costs. Her and I at the end of that conversation respectfully agreed to disagree, I guess, on o on what those things uh might be. But of course many of those things are things California farmers are are facing today. And you know the United States is the world's largest agricultural exporter. California is a big part of that. I represent California's Central Valley, one of the most productive agricultural regions uh in the world, and certainly in the country. You know, we have fresh produce, tree nuts, dairy products, wine, uh and these markets for these products not only uh support local jobs, uh but they support the entire community. The USMCA agreement has tangibly strengthened trade and relationships with Mexico by nearly eleven billion, Canadian exports nearly eight billion in twenty twenty-four. A recent Purdue study found that tariff reductions under the USMCA alone save American families an average of seven hundred dollars a year. So it seems rather obvious, certainly sitting in my district, that preserving a strong, comprehensive, trilateral agreement uh with two of our most important trading partners is is certainly critical. But I'm gonna now propose a question to Mister Pooley, a d of a different alternate universe where we decide to help California agriculture. And specifically specialty crops, which I have heard some discussion of uh today. And I'm wondering if you could elaborate and what could we imagine to be the most helpful policies to the specialty crop industry, considering uh many of these other uh challenges faced this past year, uh and even beyond tariff measures. If if I just open the floor to what what are the things we could do to really strengthen and support our specialty crop uh industry.

Thank you Congressman Gray, appreciate the question. Uh and now you've done it, you've gone beyond USMCA. What else could we do? Uh well, this committee has had some focus on our ag labor situation. Chairman Thompson has been diligently focused on that. If there's one thing beyond um this issue, our trade relationships, that could um greatly benefit Western producers in the special crop industry, California specifically, given our very, very high labor costs, it would be to address our chronic shortage of affordable and legal labor. Uh, we are a very labor-intensive industry, as you know. Uh, anywhere from forty to as high as fifty percent, depending on the crop and the location, uh, is, is the cost of, of, of labor as a total cost of production. So I would say that that would be, um, that would be our, our, our holy grail. Uh, but having said that, uh, there are elements of USMCA, as I've stated previously, that can be addressed that would help somewhat level the playing field. We do have an a chronic imbalance in cost structure between Mexico and U and US producers that probably isn't going to change but it doesn't have to be as dramatic as it is. And so we've suggested, particularly around labor enforcement, that Mexico be held to greater account to live up to its commitments in the USMCA, uh so that we have a more uh balanced um um labor situation in terms of cost of production between the two countries.

I appreciate uh that answer and certainly appreciate both the Chairman and the ranking members' efforts to support specialty crops, support California and uh appreciate the leadership of uh Western Growers. It's very nice to see you.

Good to see you too.

Gentleman yields back. Um before I proceed to closing comments I just will say this today would be a great opportunity to help not just specialty crops but um all the commodities are represented here and all the commodities in the country, by signing on as an original co-sponsor to the Securing Agriculture Workforce Act. Uh, this is a a piece of legislation that has been built with a obviously with the task force that this committee formed uh last Congress. And um uh I would just uh if you wanna know what to do to help, especially crops and everyone else, signing on as an original co-sponsor today, I would say would be the most immediate step to take. Uh, with that, I um before we adjourn today, I wanna invite the ranking member to share any closing comments that she might have.

Thank you so much, Mister Chairman. Um, so today we've heard from the Chairman, Republicans, Democrats, and every one of our witnesses on the value of USMCA for opening up markets for US producers. And unbelievably, this has happened at the exact same time that the president went on TV and said that he may not renew it. You cannot make this stuff up. American businesses cannot thrive in a vacuum, whether you're a farmer growing crops or a trucker hauling livestock across a border for processing stable friendships with our neighbors and stable markets are good business. chaos, tariffs, and war, and tweets? Not so much. The Trump administration has a choice. And as of about forty minutes ago, according to Reuters, it's threatening not to renew the USMCA. Now, this administration could use USMCA as an opportunity to help level the playing field for American farmers and lower food costs for American consumers. Or they can further undermine relations with our closest and largest trade partners. And I'm disappointed but not surprised to see the direction that this administration is leaning. I know which outcome working people, farmers, and families that I've spoken to would prefer. I'm unclear if those priorities resonate with the administration. Will we prioritize lowering costs or continue the chaotic Midnight diplomacy of a president who upends markets every time he tweets. I just wanna say thank you to our witnesses who came here today, ready to talk about the importance of a stable market and strong trade relationships. We sincerely appreciate your time and your testimony. And with that, Mr. Chairman, I yield back.

Well, I thank the, thank the General Lee for closing comments. Um. I wanna thank the panel and and our staff uh on both sides of the aisle that worked so hard to uh uh uh make uh these hearings happen. Uh um the USMCA has been a highly effective at expanding regional trade, pushing commerce uh obviously ag and beyond uh near two trillion dollars annually and making Mexico and Canada the United States' top trading partners with significant gains in agriculture. Uh, USMCA has really served as a model, I think. Trade agreement, um, that will benefit from refinement, including improvements with enforcement. Uh, the House Agriculture Committee, uh, will be at the table, uh, to assure that the voices of our agriculture commodities are heard. uh building building on the eighteen trade agreements successfully achieved by the President's administration in the past eighteen months. Uh this coupled with the Ag Committee's leadership in legislating uh with the farm bill uh where we doubled the market access program and the uh foreign market development program among others uh is good news for our farmers and our ranchers. um and for consumers in in the end of the day. The US agriculture trade deficit is projected to narrow to twenty nine billion dollars for fiscal year two thousand twenty six. Now that's still too high um but we didn't um I s- but it's a significant recovery from the record setting forty three point seven billion dollar deficit. And this represents a forty two percent reduction in the trade gap supported uh largely by renewed international trade agreements. You know, an informed and and re- an informed refinement and reauthorization of USMCA is absolutely critical. Um, yeah, I believe uh, and I know, that this gap will continue to to close to where we we once again in this country will have a uh as with trai- with agriculture a trade surplus um uh as we accomplish this. And so once again thank you to our our panel today for uh um for bringing your knowledge, your wisdom, your insight, and your representation of all the hard-working families that uh uh that uh that you represent. Under the rules of the committee, the record of today's hearing will remain open for ten calendar days. to receive additional material and supplementary written responses from the witnesses to any question posed by a member uh this hearing of the committee on agriculture is adjourned.