When negotiations of the North American Free Trade Agreement (NAFTA) kicked off in August, there was hopes from all three countries that talks would wrap up before the end of 2017. This optimism to update the 25-year agreement has been shattered after disagreements between the U.S. and Mexico have pushed talks into 2018 at the latest.
During the 2016 presidential campaign, then-candidate Donald Trump called NAFTA the “worst deal ever” and has continued that rhetoric in the Oval Office.
From an agricultural perspective, opinions seem to be split on bringing the trade agreement into the 21st century. Jim McCormick, senior broker and market commentator of Allendale, Inc., thinks ag producers should be “worried” if talks between the U.S. and Mexico aren’t resolved.
Mexico is the top importer of U.S. corn, purchasing 97 percent of their supply from the U.S., according to McCormick. If trade talks go sour, they could turn to other sources.
“If we get into a trade war with them, there is a potential they can move away from us,” he told AgDay host Clinton Griffiths. “We’re finding out now they don’t have to [buy corn from the U.S.]. They’re snooping around South America. They’re trying to give themselves different alternatives.”
He said if the eastern U.S. can justify importing corn from South America, Mexico could do the same, but that’s only if the negotiations don’t work.
Hear his full comments on if the negotiations are bilateral and how the 2018 Mexican presidential election could play a role in NAFTA talks on AgDay above.