PHOENIX, Ariz. — The United States may withdraw from the North American Free Trade Agreement, but many in the United States agricultural sector hope negotiations produce a new and improved deal.
“I am not yet convinced the administration has not decided whether it will withdraw from NAFTA,” said Republican senator Jerry Moran.
Speaking before a committee of the National Cattlemen’s Beef Association, the Kansas senator praised the benefits of NAFTA for America’s agriculture base.
“We make a living in rural America because we sell what we produce outside the United States,” said Moran. Nearly half of Kansas’s agriculture output is exported.
“We might not like having to deal with the rest of the world but if there is going to be prosperity today and in the future for the places we come from, it is because we have the opportunity to produce at a level of production that feeds more than just the people in the United States,” he said at the NCBA convention held Jan. 30-Feb. 2 in Phoenix.
He urged the organization to explain the economic value of deals like NAFTA and the Trans-Pacific Partnership to officials in Washington.
U.S. President Donald Trump’s decision to walk away from the TPP has left the U.S. on the outside. The multilateral agreement, scheduled to be signed next month in Chile, gives member countries like Canada and Australia an advantage over non-members like the U.S. in other TPP countries. Tariffs among TPP members are substantially falling and access for various products will improve under the proposed deal.
There is little chance the U.S. could salvage what was lost even though Trump mused about a possible return.
“I would not put a lot of faith in the president’s comments about rejoining TPP until we take actual steps toward doing that. He has done nothing but rail against TPP since he was campaigning and it was one of the first actions he took when he came into office,” said Kent Bacus, NCBA director of international trade and market access in Washington.
The president favours bilateral agreements and expected a deal with Japan but it chose to back TPP instead.
As well, Trump’s threat to leave NAFTA could result in the U.S. having to pay high tariffs to get products into Canada and Mexico, said Bacus.
Mexico could charge a 25 percent tariff on beef and 200 percent on U.S. poultry. Consequently U.S. poultry would stay home and that could damage the entire U.S. meat complex, he said.
Bacus and others are hoping NAFTA negotiations can be smoother since a chief agriculture negotiator is likely to be confirmed by the Senate. Greg Doud, formerly with the NCBA, fills a job that has been vacant for more than a year.
“The threats of withdrawal are real and they are still real but we have definitely seen a lot of progress with the renegotiation because we have some good people in the administration to advise (the president),” said Bacus.
The trade attorney for the NCBA is more optimistic about the future of NAFTA. Threats to withdraw are more likely a negotiating tactic, said Gary Horlick.
In his opinion, the 30-year-old deal has been a huge success but needs modernization to facilitate business.
Exiting NAFTA could be complicated.
“One of the problems with withdrawal or signing a notice is it creates huge amounts of uncertainty,” he said.
“My prediction is, I don’t think we are going to see a withdrawal from NAFTA and if it is, you are going to see legal and business chaos,” he said.
“Negotiations will keep going and the current agreement, which suits us fine, will stay in place,” he said.