High-Stakes Trade Talks

November 7, 2017 10:40 AM
Mexico US Border

The two discussions among U.S., Canada and Mexico representatives on the North American Free Trade Agreement (NAFTA) have yielded little to no resolution so far on major issues that affect agriculture.

President Donald Trump, who repeatedly slammed NAFTA during his presidential campaign, calling it the “worst trade deal” the U.S. ever approved, repeated those assertions in late August after the initial meeting of the three countries. Much of his criticism then and now has focused on the U.S. trade deficit with Mexico ($63 billion in 2016), which he often references as causing the loss of U.S. manufacturing plants and jobs.

Despite Trump’s dislike of NAFTA, his administration in mid-August had outlined its objectives for the talks, which include “cutting the U.S. trade deficit with Mexico, encouraging greater labor market integration, improving market access for American manufacturers and farmers, and eliminating unfair trade practices.”

NAFTA has been a boon for the U.S. agricultural industry. According to a June 2016 USDA report, U.S. food and agricultural exports to Mexico and Canada have more than quadrupled—from $8.9 billion in 1993 to $38.6 billion in 2015. Many farm groups have adopted a “do no harm” position on the talks.

This past spring, 18 senators, including Sen. Pat Roberts, R-Kan., chairman of the Senate Agriculture Committee, wrote to President Trump to point out the positive economic benefits of NAFTA. They urged him to preserve it, that any “efforts to abandon the agreement or impose unnecessary restrictions on trade with our North American partners [would] have devastating economic consequences.”

The senators did note, “given that the agreement is more than two decades old, there are areas in which NAFTA will benefit from strengthening and modernization.”
Dave Salmonsen Sr., the director of congressional relations for the American Farm Bureau Federation, said there are several areas NAFTA could benefit from using some of the language agreed to in the Trans-Pacific Partnership deal the U.S. pulled out of earlier this year.

Those include issues with Canadian dairy policies on tariffs and the country’s new pricing system that ended a market for ultra-filtered milk for several U.S. dairy producers.

Salmonsen also says he believes there are a number of rules-related issues that can be improved upon through negotiations, such as food safety using better science-based risk assessments and the biotech approval process, as well as geographic indications that impact dairy and meat products. He is hopeful the deadline pressures of renegotiations will “help bring progress on a number of issues at one time because they are part of a bigger package.”

To date, at least 130 agricultural associations and food groups have shared their support for NAFTA with President Trump.

The trade talks are expected to last at least through the end of this year. Mexico has indicated it would like to wrap up the renegotiations before its 2018 presidential election. However, Reuters quotes Canadian officials as saying that modernizing the trade pact in any serious, useful way will take two years.

What Is At Stake In Trade Renegotiations

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