WASHINGTON (AP) — President Donald Trump on Monday celebrated a revised North American trade deal with Canada and Mexico as a return of the United States to a “manufacturing powerhouse,” vowing to sign the agreement by late November.

President Trump Delivers Remarks on the United States-Mexico-Canada Agreement https://t.co/hZFMxLBTi9

— The White House (@WhiteHouse) October 1, 2018

 

But the president noted that the deal would need to be ratified by Congress, a step that could be complicated by the outcome of the fall congressional elections. When told he seemed confident of congressional approval, he said he was “not at all confident” but felt ratification would be granted if lawmakers took the correct action.

“Anything you submit to Congress is trouble no matter what,” Trump said, predicting that Democrats would say, “Trump likes it so we’re not going to approve it.”

Trump embraced the U.S.-Mexico-Canada Agreement during a Rose Garden ceremony, branding the pact the “USMCA.” The president said the name has a “good ring to it,” repeating U-S-M-C-A several times.

A good day for Canada & our closest trading partners. More tomorrow… https://t.co/qOowhvYW2B

— Justin Trudeau (@JustinTrudeau) October 1, 2018

The agreement was forged just before a midnight deadline imposed by the U.S. to include Canada in a deal reached with Mexico late in the summer. It replaces the 24-year-old North American Free Trade Agreement, which Trump has lambasted as a job-wrecking disaster that has hollowed out the nation’s industrialized base.

Flanked by Cabinet members, Trump said the pact is the “most important deal we’ve ever made by far,” covering $1.2 trillion in trade. The president said his administration had not yet agreed to lift tariffs on steel and aluminum imports from Canada, a contentious issue between the two neighbors.

For Trump, the agreement reached in the weeks before the November congressional elections offers vindication for his hardline trade policies that have roiled relations with China, the European Union and America’s North American neighbors while causing concerns among Midwest farmers and manufacturers worried about retaliation.

Trump’s advisers view the trade pact as a political winner in Midwest battleground states critical to the president’s 2016 victory and home to tens of thousands of auto workers and manufacturers who could benefit from the changes.

Trump said he would sign the final agreement in late November, in about 60 days, and the pact is expected to be signed by Canadian Prime Minister Justin Trudeau and outgoing Mexican President Enrique Pena Nieto before he leaves office Dec. 1. Trump said he spoke to Trudeau by phone and told reporters that their recent tensions didn’t affect the deal-making. “He’s a professional. I’m a professional,” Trump said, calling it a “fair deal.”

Pena Nieto will be replaced by President-elect Andres Manuel Lopez Obrador, whose incoming administration said the deal would offer more certainty for financial markets, investment and job creation.

Ratifying the deal is likely to stretch into 2019 because once Trump and the leaders from Canada and Mexico sign the agreement, the administration and congressional leaders will need to write legislation to implement the deal and win passage in Congress.

Trump threatened to go ahead with a revamped NAFTA, with or without Canada. It was unclear, however, whether Trump had authority from Congress to pursue a revamped NAFTA with only Mexico.

NAFTA tore down most trade barriers between the United States, Canada and Mexico, leading to a surge in trade among them. But Trump and other critics said it encouraged manufacturers to move south of the border to take advantage of low Mexican wages, costing American jobs.

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It’s possible that Chinese soybean buyers could still be getting American soybeans by purchasing their beans from Argentina. Export reports show that Argentina is buying soybeans from the U.S. and exporting its own production to China. However, a grain market expert says that’s not likely because a drought left Argentina grain stocks in short supply. “The issue is that Argentina simply doesn’t have the beans,” says Standard Grain President Joe Vaclavik during a conversation with Farm Journal. “They had a short crop this year.” Also, Vaclavik says Argentina doesn’t typically export soybeans at this point in the year. Typically, Argentina crushes most of their soybean production. “It looks like Argentina is going to get their soybeans from the U.S.,” says Vaclavik. “They’ve booked 850,000 metric tons of soybeans since the first of September.” From September to February last year, Vaclavik says Argentina sold zero soybeans to China. This year, Argentina plans to ship 1.8 million metric tons during the same period. Even if U.S. beans aren’t being sold directly to China, he says the export market is still helping prices. Farmers have long suspected China of buying soybeans through “gray” market channels.

Senate Ag Committee Chair Pat Roberts says he’s working on getting the U.S. Ag Department to extend a “lifeline” to programs that will lack funding if the farm bill didn’t pass by the Sunday deadline. The current farm bill ran out over the weekend and funding for a lot of smaller initiatives will be in limbo. Politico says there are about 40 programs that could be in trouble because they’ll lack mandatory baseline funding without a new farm bill. Advocates and industry groups are concerned that some of the programs may have to temporarily close their doors if there isn’t a reliable source of funding for them to stay active. The Kansas Republican says they’re making arrangements so those programs don’t have to close during the interim period. “The same thing happened in 2012,” Roberts recalls. “That’s not the way we would have liked to see things go, but I think they know they’ll be fully funded. Right now, it’s just a temporary hiccup.” House Ag Committee Chair Michael Conaway says the USDA’s trade aid package could help fill in for the Foreign Market Development Program, which wouldn’t have baseline funding. The aid package contains a trade-promotion element of $200 million, while the FMD program costs $34.5 million annually.

The current farm bill is set to expire on Sunday. Top lawmakers now admit they will likely have to finish putting together a new farm bill after the November 6th midterm election. Politico says the timing isn’t surprising to most observers. There’s been a lot more sniping between House and Senate negotiators than there have been signs of progress over the past month. Failure to meet the September 30th deadline is a defeat for ag leaders who said they were determined to finish a new farm bill before the current one expired in order to give needed certainty to farmers and ranchers. Senate Ag Chair Pat Roberts says he hopes negotiations will make enough progress to vote on a final farm bill the week after the election. However, political leverage could shift significantly if Republicans lose control of the House and Senate. Some members of the farm bill conference committee are warning that waiting until November will add a whole lot more challenges to the negotiations. North Dakota Senator Heidi Heitkamp says there “may not be the political will to get it done” after the midterms. Not a single farm bill title had been finalized through the middle of this week.

Three state representatives are asking U.S. Trade Representative Robert Lighthizer to slow down the pace of the North American Free Trade Agreement negotiations. They feel that gives the U.S. the best opportunity to come to a fair agreement on dairy exports. Representatives from Wisconsin, Washington, and New York all represent states that need open-market access to Canada in order to support their dairy exports. Milk Business Dot Com says there hasn’t been any substantial progress in accessing the Canadian dairy market or dismantling their Class 7 pricing system. Wisconsin and New York dairy farmers were hit the hardest when Canada implemented its Class 7 milk pricing system in the spring of 2017. As dairy prices across the U.S. remain low, the three representatives say their farmers are depending on access to the Canadian market in order to sell their “world-class dairy products.” In their statement, the legislators say, “We urge Ambassador Lighthizer to stop rushing the NAFTA negotiation process and focus on getting the best deal with both Canada and Mexico.” They add the arbitrary deadlines the administration says it faces are its own. “We should not be rushed to complete NAFTA negotiations at the expense of a good outcome,” they say.

Bloomberg says the Trump Administration will release the text of a bilateral trade agreement with Mexico on Friday. While the text will likely exclude Canada, it will leave open the possibility of Canada joining the agreement later. U.S. trade law says the text of the deal has to be published 60 days before it can be signed. U.S. Trade Representative Robert Lighthizer says the U.S. is moving forward with the Mexican agreement so the current president can sign it before he leaves office on December 1st. Canada is currently negotiating with the U.S. to join the pact but there are still several issues the two countries haven’t reached an agreement on. Lighthizer says the U.S. doesn’t want to risk having to renegotiate the pact with the incoming president of Mexico. “It wouldn’t be fair to the people involved, certainly U.S. workers, farmers, and ranchers, to start a new negotiation with a new president of Mexico,” says Lighthizer. Trade talks will continue with Canada, even after the deadline passes on Sunday. Lighthizer says the two countries may even carve out a separate deal.

China soybean processors are purchasing record volumes of Brazilian soybeans and cutting purchases of U.S. soybeans. U.S. soybeans face steep tariffs in China thanks to the ongoing tit-for-tat trade war between the U.S. and China. A Singapore-based trader told Reuters that China is “willing to pay higher prices for Brazilian beans than what domestic crushers are paying.” Brazil’s typical soybean export season ends in September, and the U.S. provides to the market through March. However, China is importing a record 14 million metric tons of Brazilian soybeans for arrival in October and November. In 2017, Brazil shipped just under nine million metric tons of soybeans to China in the final quarter, which was the previous record. Brazil is the world’s top soybean exporter and the United States is the second top exporter. U.S. farmers are harvesting an estimated record soybean crop this year, but China has purchased just a fraction of soybeans from the U.S. compared to its long-term average.

The CEO of Cargill says he is concerned with the long-term health of U.S. agriculture due to impacts from the U.S.-China trade dispute. Cargill CEO David McLennan told Bloomberg News a long-term dispute with China could squeeze the U.S. out as China turns to other sellers of soybeans, as the nation is doing now. Soybean prices are near the lowest levels in a decade as a result of the trade war and an expected record crop in the U.S. this fall. MacLennan of Cargill spoke with Chinese leaders over the summer who told him the country “wouldn’t back down.” He says speculatively, that means China will find alternative sources of supply, but concedes “price can drive a lot of different decisions.” Cargill is spending more time with lawmakers and government officials expressing desire to see a swift end to the trade war. MacLennan says Cargill recognizes the goal of the Trump administration to make trade more fair and balanced, but says “we just think there are other tactics that can be pursued to improve trade relations.”