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USMCA trade agreement ratified by President Trump in boom for biofuels industry

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US President Donald Trump has officially signed the United States-Mexico-Canada Agreement (USMCA), which modernises the previous trade pact between the three nations, strengthens trade relationships and provides critical market access for US agriculture.

Welcoming the passage of USMCA, US ethanol association Growth Energy CEO, Emily Skor, said: “This historic agreement between the US, Mexico and Canada is welcomed by biofuel producers across North America, as it reinforces our already strong trade relationship and opens the door for more opportunities for our allies in the agriculture industry.

“We are grateful to President Trump, his administration, and our champions in Congress for their steadfast commitment to securing this win for American agriculture.”

Canada has yet to ratify the trade agreement, however once this happens, the three countries must then meet procedural obligations before the deal takes full effect.

The USMCA provides market access and trade opportunities for US biofuels and its co-products. Mexico’s decision to move towards a blend of 10% ethanol in transport fuel nationwide could deliver a potential new market of 1.2 billion gallons for US producers, according to Growth Energy.

Canada, meanwhile, is the second-largest ethanol export market for the US, accepting 347 million gallons in 2018. The Canadian market has the potential to expand over the next 10 years, due to changes in both federal and provincial policy, including decisions by Ontario and Quebec to move to a 15% ethanol blend.

Mexico is also the largest export destination for US dried distillers grains (DDGs), with over two million tonnes shipped in 2018. Canada was the seventh largest export destination for DDGs, with 664,000 tonnes exported in 2018.