U.S. farm and commodity groups are avid supporters of the North American Free Trade Agreement. Now that renegotiations of the deal could begin this summer, the groups are loudly voicing that opinion.
On May 18, U.S. Trade Representative Robert Lighthizer notified Congress of plans by President Donald Trump’s administration to revamp NAFTA.
The notification initiated a 90-day period in which Trump officials must consult with Congress about the trade talks with Canada and Mexico.
The notification isn’t surprising because Trump has threatened many times to pull America out of the 23-year-old trade deal unless better terms could be negotiated for U.S. companies and workers.
Millions of Americans agree with Trump, particularly in states such as Michigan, Pennsylvania and Indiana. However, farm and commodity groups say the trade deal is critical for U.S. producers.
The National Cattlemen’s Beef Association (NCBA), the National Pork Producers Association and the National Corn Growers Association issued statements supporting NAFTA immediately following the notification.
The releases featured data on the economic benefits of the trade agreement, such as:
- For U.S. pork, Canada is the number four export market and Mexico is number two. In 2016, the U.S. exported almost $800 million in pork to Canada and $1.4 billion to Mexico, the pork producers association said.
- Since NAFTA was implemented, U.S. agric-food exports to Canada and Mexico have tripled and quintupled, respectively, the corn growers association said.
“Exports are one pillar of a strong farm economy, accounting for 31 percent of farmer income,” said corn growers president Wesley Spurlock in a May 18 statement.
“Nowhere is the importance of trade stronger than right here in North America.”
The NCBA went even further to declare its support. The Canadian Cattlemen’s Association, the Confederación Nacional de Organizaciones in Mexico and the NCBA sent a joint letter to Trump, Prime Minister Trudeau and Mexican President Enrique Pena.
The letter encouraged the leaders to preserve unlimited and duty-free trade of beef between the three countries.
“We believe that our economies will be stronger under NAFTA than without NAFTA. We urge you not to jeopardize the success of the men, women and families engaged in the cattle and beef industries of each of our countries, who depend on the success that market access provides under NAFTA.”
It also warned U.S. trade negotiators to learn from “mistakes of the past” and not use the process to restore mandatory country-of-origin labelling.
“M-COOL failed to deliver its proponents’ promise to increase consumer demand or consumer confidence. Instead, it created massive disruptions in live cattle trade that hurt beef producers across North America and jeopardized the jobs of American workers that depend on processing those cattle.”
COOL was law in the U.S. for about seven years, requiring labels saying meat was a “product of the USA,” “product of Mexico” or “product of Brazil.” Canadian pork and beef producers complained that the regulation unfairly discriminated against Canadian products and violated international trade rules.
Canada and Mexico took their complaints to the World Trade Organization. The WTO ruled for Canada and Mexico several times and the U.S. Congress finally repealed COOL in December 2015.
Beef, corn and other commodity groups in the U.S. may support the existing NAFTA deal, but the National Milk Producers Association does not.
In a May 18 statement, it commended the Trump administration and asked the U.S. Trade Representative to challenge Canada’s “protectionist policies” around dairy products.
“Obviously, dairy trade with Canada — where we continue to face 200 percent to 300 percent tariffs and a slew of non-tariff policies that distort dairy trade — is an entirely different story,” said association president Jim Mulhern.
“We need to address it as part of these talks. Central to any successful NAFTA negotiations will be changes to Canada’s new policies designed to harm bilateral trade and dump their structural dairy surplus on the world market.”
Now that Congress has been notified, the re-negotiation of NAFTA can begin Aug. 16, at the earliest.