NAFTA replacement benefits US supplements, food producers, NPA says

31-Jan-2020 - Last updated on 31-Jan-2020 at 15:49 GMT

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The new trade deal that modified the NAFTA pact is the first to specifically mention supplements and could benefit the industry, a trade organization says.

The Natural Products Association sent a note to its membership altering them to the fact that the new pact, dubbed the United States-Mexico-Canada Agreement (USMCA), has specific mentions of dietary supplement ingredients.

“This is a good deal for the small businesses that make up the majority of our industry and the millions of consumers who use nutritional supplements every day to support their healthy lifestyles. We applaud the Trump Administration for reaching this deal and look forward to finding more ways to grow the economy and create jobs together,” said NPA president and CEO Daniel Fabricant, PhD.

New deal modifies NAFTA

The new agreement modifies the 25-year-old North American Free Trade Agreement (NAFTA), which President Trump vilified during his campaign. The 2,082-page pact adds in new laws on intellectual property protection, the internet, investment rules, how state-owned enterprises are treated and currency regulations.

According the The New York Times, the new pact would serve to encourage more passenger car and truck production in the United States and would open the Canadian market to US dairy farmers.

The agreement also includes new provisions aimed at curbing labor abuses in Mexico, something The Times said was due to pressure from Democrats who now control the US House of Representatives and without whose support the treaty could not go into effect.

The provisions pertaining to the dairy industry could be of particular importance to the suppliers of dietary ingredients, NPA said.

Boon to whey producers

According to NPA’s assessment, USMCA will over a period of time fully open the Canadian market to whey protein powders made in the US. Up to now the Canadian dairy market has been tightly controlled via a government monitored supply control system.

According to NPA in the first year of the agreement, the quota for US whey powder will increase to 689 MT; in year two, 1,378; in year three, 2,068; the fourth 2,757; then 3,446 in the fifth year and 4,135 MT in the sixth year. Import quotas on certain US whey powders will be eliminated by year 10.

The pact will also create new markets for American cheese manufacturers and milk suppliers and will benefit poultry and pork producers as well, NPA said. There is also a provision that could benefit US winemakers.

The new pact will also make some aspects of ingredient sourcing easier, according to NPA. A product will now be able to have up 10% of its constituents come from countries other than the US, Mexico or Canada and still qualify for the benefits of the trade deal. This is up from 7% under NAFTA.

Another important aspect of the new pact is the strengthening of intellectual property protections, especially as it relates to confidential information that must be disclosed to government officials as part of regulatory proceedings, NPA said.