House passes USMCA trade agreement

By Erin Voegele | December 20, 2019

The U.S. House of Representatives passed the U.S.-Mexico-Canada agreement on Dec. 19 by a vote of 385 to 41. The trade pact, which was signed by the three countries in November 2018 to replace the North American Free Trade Agreement, is expected to benefit ethanol producers. The U.S. Senate must also ratify the agreement. That vote, however, is not expected to take place before the end of the year.

The American Coalition for Ethanol said the new agreement solidifies a multi-billion dollar export market while providing more certainty to farmers and instilling confidence in other nations that the U.S. is a reliable partner and supplier to help U.S. agriculture remain competitive for years to come.

“Canada is the most reliable export market for U.S. ethanol over the course of time, while Mexico continues to be the largest buyer of U.S. distillers dried grains (DDGs) and holds great potential for increasing U.S. ethanol exports.” Said Brian Jennings, CEO of ACE. “While USMCA doesn’t directly address ethanol specific trade provisions, the passage of this agreement is key to maintaining positive relationships with our neighbors to the north and south and future opportunities in these markets for ethanol, the fastest-growing agricultural export in the U.S.”

The Renewable Fuels Association called the USMCA a crucial trade pact that will benefit U.S. ethanol producers and rural economies across the nation.

“America’s ethanol producers are encouraged by the approval of USMCA in the House, and we urge the Senate to act swiftly to ratify the agreement,” said Geoff Cooper, president and CEO of the RFA. “Canada and Mexico are among our most important and reliable export markets for both ethanol and distillers grains, and we look forward to strengthening our trading relationship with the two countries. USMCA is a good deal for the U.S. ethanol industry, the farmers who support us, and our industry’s partners in Canada and Mexico.”

According to the RFA, Canada purchased 350 million gallons of ethanol from the U.S. in 2018, making it the second largest U.S. export market for ethanol. Canada also ranked in the top 10 markets for U.S. distillers grains exports.

The RFA also noted that Mexico was the top market for U.S. distillers grains exports in 2018, purchasing more than 2 million metric tons of the coproduct. The country also ranked in the top 10 markets for U.S. ethanol exports.