Trade War With Mexico Possible If NAFTA Isn't Renegotiated

November 3, 2017 12:24 PM

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.

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Spell Check

Eastern , NE
11/5/2017 01:18 PM

  Whoops! Meant to write executive greed and not largesse.

Cayuga , IN
11/4/2017 10:56 AM

  Dress up in the suit and tie, smile for the camera. Farmers problems are, low prices, imports, inputs and Corporations. Trump and Cargill please come to the spotlight. Chicken.

Eastern , NE
11/5/2017 10:50 AM

  There are always winners, losers and whiners in trade agreements. Large corporations have always viewed labor as evil. Labor lost with NAFTA. Raw ag commodities seemed to have won. Why is Trump whining so much? He seems to choose imports over domestics all the time. Look at his wives, they're imports! Is that his motive, to sell out ag quietly under the table in favor of more imports? Labor won't recover unless corporations reduce their executive largesse and realize their attitude towards the little guy sucks. Plus you have to find Americans willing to do the job.


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