ATLANTA — Georgia industries are hopeful a revitalized trade agreement with Canada and Mexico will boost trade profits in some sectors, but leave producers unprotected.

The new North American trade deal will have positive impacts on Georgia manufacturing and poultry, industry experts said, after President Donald J. Trump withdrew from NAFTA early in his presidency.

While provisions to protect producers are left out of the final deal, members of Georgia’s federal delegation said they are vowing not to leave the fruit and vegetable growers behind and have a plan to address unfair trade practices.

U.S. Rep. Austin Scott, senior member of the House Agriculture Committee, told CNHI that while partisan battles dominate Washington, D.C., the United States-Mexico-Canada Agreement is proof Democrats and Republicans recognize the current strength of the American economy.

“The economy is so good in the United States and the way you keep it good is that you have to have trade agreements, and you keep opening up markets for the U.S. to export into,” he said. “The one thing that I think everybody can agree on is the economy is good and we have momentum as we go into these trade negotiations.”

Adam Rabinowitz, assistant professor and extension economist at the University of Georgia campus in Tifton, said with uncertainty looming in negotiations between other trading partners, having an agreement nearly set in stone with our bordering trade partners is a sigh of relief.

“These are going to be markets that can be easily accessed and and that’s vital,” he said.

Early impacts of the coronavirus — Convid-19 — outbreak have destabilized trade agreements between China and the U.S., slowing exports and holding up imports with quarantine measures, according to national trade officials.

While economists are weary to pinpoint an impact of the crisis, Georgia politicians say now, more than ever, the U.S. needs to explore alternative markets other than China.

Good news for manufacturing, poultry

Finalized in mid-December, supported by all 14 members of Georgia’s U.S. House delegation and passed by the Senate last month, the U.S. Mexico-Canada Agreement has garnered bipartisan support. Canada is the only country that has yet to ratify the agreement, but is expected to in the coming month.

Industry and state leaders have agreed that while possibly limited, the new trade pact will have overall positive impacts on Georgia trade.

“The USMCA will open new markets for Georgia-grown goods and add to the tremendous success of the Savannah Port,” Kemp said in a statement. “The bipartisan passage — and now signing — of the USMCA represents a promising, new era for fair trade between the U.S., Mexico and Canada.”

Roy Bowen, president of the Georgia Association of Manufacturers, said the biggest win of the deal is removing uncertainty between trade partners.

“This removes the uncertainty as to trade protocols between Georgia’s two largest trading partners,” Bowen told CNHI. “I think that degree of uncertainty about what was going to happen because of the USMCA was tending to stifle investment to have some impact on production decisions. With that out of the way. We really do see great benefit for many Georgia manufacturers.”

Bowen said the textile industry will likely see the greatest positive impact of the deal that broadens access to Canada while restricting labor practices in Mexico.

Mike Giles, president of the Georgia Poultry Federation, said his organization is supportive of the USMCA and is an “overall positive story” for the poultry industry.

Scott told CNHI the biggest wins out of the USMCA for the U.S. are intellectual property protection, digital trade rules, manipulation of currency protections and labor practice provisions.

Updates to the North American trade agreement will give the U.S. a “more level playing field,” he said, in regards to cost of manufacturing as well as an expected increase in poultry product exports.

Producers left wanting

However, not all industries are expected to benefit from the revamped agreement.

A policy brief written by the University of Georgia’s agriculture and applied economics department from April 2019, speculated the agreement will have harmful effects on U.S. fruit and vegetable growers.

Jeffrey Dorfman, the new chief fiscal economist in the governor’s office, is among the authors who said: “While the deal may be an overall positive for the United States, it exposes U.S. fruit and vegetable growers to a high risk of substantial harm through unfair competition from Mexican imports.”

The study predicted the agreement could cost the state 8,000 jobs and $1 billion in economic output.

On a county basis, losses in Tift, Lowndes and Colquitt, among other high agriculture producing areas “will likely reach economic damage rarely seen since the Great Depression,” the study says.

Dorfman, who declined comment for the story due to his new position with the state, told lawmakers during early budget hearings that the USMCA will be good for poultry, but not so good for Georgia produce.

Rabinowitz said producers see similar concerns with USMCA as they did with NAFTA.

“There weren’t any significant changes for the fruit and vegetable producers and that’s really the biggest issue,” he told CNHI. “It’s hard for them to compete — the southern Georgia fruit and vegetable growers — with imports from Mexico where there’s support for expansion and production and in particular low cost of labor.”

Georgia producers rely on migrant workers through the federal H-2A temporary visa program that has many restrictions making the program costly for farmers.

Charles Hall, executive director of the Georgia Fruit and Vegetable Growers Association, said producers have been facing this issue for decades and don’t expect much to change.

“Depending on how Mexico increases their produce production,” Hall told CNHI, “it will continue to affect our efforts as far as being able to produce a profitable crop.”

Hall said the association is working on marketing efforts to make producers and consumers more aware of positive impacts of buying Georgia-grown and American-grown produce.

Scott said while a provision to protect fruit and vegetable growers from unfair trade practices is not part of the final agreement, he has received a commitment from President Trump’s chief trade negotiator — Ambassador Robert Lighthizer — that they will address concerns.

Lighthizer outlined a multi-faceted approach to the problem in four steps: collecting documentation from the produce industry on policies that may impact unfair prices, conducting field hearings in Georgia and Florida to hear from producers, request help from the International Trade Commission to monitor produce imports and work to bring legal case support to farmers under the Tariff Act of 1930.

“The Office of the United States Trade Representative, effectively will begin working immediately with the U.S. government and other state agencies to identify any type of trade distorting policies that Mexico, may be engaged there,” Scott said. “In other words, if Mexico is subsidizing the production of fruits and vegetables in Mexico, that would be potentially an unfair trade practice.”

Scott said addressing the concerns of the fruit and vegetable industry is something that shouldn’t slip through the cracks.

But trade disputes for farmers means uncertainty in pricing but also in planning production effectively, Rabinowitz said.

“One of the challenges is that it’s tricky to look at one region and looking at potentially how it impacts the entire U.S.” he said. “That’s one of the challenges with addressing some of the concerns in the Southeast — certain growers out in California, do not face the same challenges.”

Despite possible negative impacts, industry leaders hope the new deal will counteract ups and downs in trade with China caused by trade wars and now complications of the coronavirus.

Coronavirus impacts China market

This month China slashed tariffs on soybeans, pork, fish and auto parts in half as a first phase of its trade deal with the U.S.

The trade deal is set up with a series of targeted purchases, with China agreeing to purchase $200 billion worth of U.S. exports during the next two years — including $40 billion in farm goods. But the recent coronavirus outbreak is casting doubts that China will meet the requirements.

During an appearance on Fox Business on Feb 4., White House economic adviser Larry Kudlow said the spread of the Wuhan coronavirus in China will affect its ability to purchase massive amounts of U.S. goods.

“The export boom from that trade deal will take longer because of the Chinese virus, that is true,” Kudlow said.

Kudlow said while it is a tragedy for China, the situation could spur investment in the U.S.

Bowen said China’s coronavirus, now known as Convid-19, outbreak is causing people to rethink supply chains all across the world — possibly boosting interest in American manufactured goods, but not without upfront hits to trade profit.

“I think there will definitely be some financial impact on Georgia companies relying on China or exporting to China,” he said.

Bowen predicts companies that import medical supplies, apparel and toys from China could be hit the worst by the impacts of the virus.

Rabinowitzs said it’s hard to pinpoint the impact of the virus but it’s safe to say any change would be a “short-term hiccup” as opposed to long-term impact.

“I’ve heard that there are some ports that are still operating normally in China; I’ve heard others reports where some cargo ships that were destined for China have been rerouted to other locations,” he said. “Certainly, the wider spread that this disease is with an impact from quarantines and such, the more difficulties it could pose to trade.”

The Georgia Ports Authority did not respond to multiple requests for comment on if Georgia ports are seeing any impact from the virus.

According to POLITICO, at a World Trade Organization meeting Feb. 11, China warned trade officials that shutting down imports from the country would have a large global impact. Imports into China are also being affected by quarantines set up at ports.

The U.S. has not ordered a quarantine on imports of Chinese goods, although there is a ban on travels from China.

Scott said despite the outbreak, the U.S. should already be exploring alternative trade agreements.

“The U.S. needs to be negotiating bilateral trade agreements with other countries in Asia so that we’re expanding markets, outside of China,” Scott said. “China is not a good actor on the global stage.”

A new trade agreement with Japan, he said, has the potential to open up the agriculture market.

“If you look at the U.S. economy,” he said, “now is the time for us to be negotiating because our economy is the strongest in the world right now.”