The future of the North American Free Trade Agreement (NAFTA) is still in question with few details available to those outside the negotiating room. The sixth round of talks were held the week of Dec. 11 in Washington, D.C., continuing the renegotiation process, which began on Aug. 16, 2017.
While the trade agreement has been largely good for agriculture with exports to both Mexico and Canada increasing steadily since it was implemented nearly 30 years ago, President Donald Trump believes that NAFTA has not been a good deal for many American workers and businesses. Trump’s stance prompted him to notify Congress on May 18, 2017 of his intent to renegotiate the trade agreement.
The Office of the United States Trade Representative (USTR) released its first objectives on July 17, 2017, and in a first-of-its-kind move, released a second, updated version of its objectives in November (http://tinyurl.com/NAFTAobjectives). This, according to the document, follows ongoing consultations with the Trump administration, including U.S. Trade Ambassador Robert Lighthizer, and members of the private sector, labor representatives, ranchers, farmers and leaders of the non-governmental organization community.
Sen. Pat Roberts (R-KS). who serves as chairman of the Senate Committee on Agriculture, Nutrition and Forestry. continues to support NAFTA and appeared on C-SPAN’s Newsmakers program Dec. 8 discussing the lingering tax legislation and NAFTA. In the interview, Roberts said. while the possibility still exists that the U.S. could pull out of NAFTA. he hopes that will not happen.
Roberts said he has met with Trump four times to discuss the issue and believes more elected officials will get involved, not just those on the agriculture committee. He noted that every senator has some agriculture in their state, saying, “I think everybody should be concerned.”
“I don’t think you have to educate farmers, ranchers, growers, all their lenders, everyone up and down main street that benefits from agriculture,” said Roberts. Noting again meaningful dialogue continues with the administration, he added, I know the president wants the best trade deals he can get. But in the meantime, don’t do any damage to our trade policies, especially when we have to sell our product.”
Trump is concerned over trade deficits, which Roberts told C-SPAN’s Greta Wodele Brawneris “very small when you look at the overall success of NAFTA.” He likened pulling out of NAFTA to Humpty Dumpty, saying, “You don’t push Humpty Dumpty off the wall, because you can’t put it back together again. To start the termination effort, to start that clock, it would send shivers all throughout agriculture.”
He went on to say agricultural producers need to plan ahead, needing predictability and stability, with talk of terminating NAFTA being counterproductive. Still, he remains optimistic recalling an encounter with Trump at the White House Christmas party. “Before I could even say, ‘Merry Christmas, Mr. President,’ he looked at me, put his thumb up and said, “We’re going to be all right on NAFTA.’”
Also following NAFTA proceedings is The Heritage Foundation (www.heritage.org/), which held a forum on Dec. 12 to discuss what is at stake for agriculture.
Moderator Daren Baskt, a research fellow in agricultural policy at the Heritage Foundation, reiterated the importance of trade agreements that give America’s farmers and ranchers access to more customers, noting that Canada is the United States’ largest export market with Mexico the third largest. “Quite simply, agricultural trade with Canada and Mexico is critical for America’s farmers, ranchers and families. So, there’s a lot at stake in these NAFTA renegotiations,” Baskt said.
Panelist Bryan Riley, director of free trade at the National Tax Payers Union, explained that trade has been an issue since before the U.S. was founded. He noted the objection to paying taxes that resulted in the Boston Tea Party, and later the drafting of the Declaration of Independence, which in outlining the reasons for cutting ties with Great Britain, says, “For cutting off our trade with all parts of the world.”
Riley added, “Our trade agreements are not just about cutting tariffs or technical ag principles, but really they are really about expanding freedom and prosperity.” He went on to talk about the difficulty to regain a foreign market once it is lost, saying, “There is no point in losing it in the first place.”
Also participating in the discussion was Darci Vetter, diplomat in residence at the University of Nebraska-Lincoln, former chief agricultural negotiator for the USTR, and former USDA under secretary.
In her remarks, Vetter discussed the trade negotiation process, saying that when negotiations conclude it marks the beginning of an additional process of implementation. “It doesn’t govern behaviors, she said, “It creates opportunity for the private sector, using the certainty provided to forge a relationship.” She went on to say that as the deal is renegotiated, each of the three NAFTA countries will also need to complete their own domestic process before any negotiated outcomes become real in terms of how it governs trade.
Referencing earlier comments about Canada and Mexico being top trading partners for the U.S., Vetter noted, “Those aren’t necessarily markets that we can afford to lose in any way shape or form.” Going on to point out, “Unlike when NAFTA was negotiated, there’s a lot of competition to be the supplier of choice into Mexico and Canada, in areas that we kind of took for granted that they would chose us.”
And although beef was not part of the discussion, Vetter said, “We’re already seeing wheat from Argentina going into Mexico, corn from Brazil, Chilean apples on Mexican shelves that weren’t there until we started questioning that underlying foundation of our NAFTA relationship. So, the process of negotiation itself, if we don’t think about creating an outcome or a path to an outcome that’s mutually beneficial, the longer this process goes on, the costlier it becomes for U.S. agriculture.”
Kent Bacus, director of international trade and market access for the National Cattlemen’s Beef Association, told WLJ the NAFTA discussions last week were expected to include more technical negotiations in hopes of making way for progress at the next ministerial round in January in Montreal, Quebec.
Vetter concluded her comments, saying, “NAFTA is also a living thing, it is a way of doing business, it is a cooperative attitude where you know that three countries have made a commitment to being integrated together, and based on that commitment will try to solve problems before they become damaging to the three parties.
“It has value beyond the numbers and it behooves us as something to maintain.” — Rae Price, WLJ editor
