How will NAFTA play out under the Trump presidency

Harry Siemens – Agriculture Secretary Sonny Perdue issued the following statement Thursday after U.S. Trade Representative Robert Lighthizer notified Congress that President Trump intends to renegotiate the North American Free Trade Agreement (NAFTA).

“While NAFTA has been an overall positive for American agriculture, any trade deal can always be improved. As President Trump moves forward with re-negotiating with Canada and Mexico, I am confident this will result in a better deal for our farmers, ranchers, foresters, and producers,” said Perdue. “When the rules are fair and the playing field is level, U.S. agriculture will succeed and lead the world. It’s why we recently announced the creation of an undersecretary for trade at USDA because as world markets expand, we will be an unapologetic advocate for American agriculture.”

Perdue, who started his first day as Sec. of Ag on May 17 said if farmers continue to grow it, the USDA will be there to sell it.

Earlier, Secretary Perdue announced the creation of an undersecretary for trade and foreign agricultural affairs in the USDA, a recognition of the ever-increasing importance of international trade to American agriculture. The new undersecretary will work hand in hand with Commerce and the USTR and help open up, even more, markets to American products.

“Agricultural trade is critical for the U.S. farm sector and the American economy as a whole.  U.S. agricultural and food exports account for 20 percent of the value of production, and every dollar of these exports creates another $1.27 in business activity.  Additionally, every $1 billion in U.S. agricultural exports supports approximately 8,000 American jobs across the entire American economy.  As the global marketplace becomes even more competitive every day, the United States must position itself in the best way possible to retain its standing as a world leader,” added Perdue.

Canadian Cattlemen’s Association (CCA) President Dan Darling and fellow beef producer group leaders in Mexico and the United States issued a joint letter to the elected political leadership of their respective countries to clarify their shared view that the terms NAFTA affecting beef producers are strongly supported as they currently exist and should not be altered.

The letter to Prime Minister Justin Trudeau of Canada, U.S. President Donald Trump, and President Enrique Pena Nieto of Mexico was signed by Darling, National Cattlemen’s Beef Association (NCBA) President Craig Uden, and Confederación Nacional de Organizaciones Ganaderas President Oswaldo Chazaro Montalvo.

The three beef cattle producer associations are united in their support that the terms of trade remain unchanged in the anticipated NAFTA renegotiations. The unlimited duty-free beef trade that NAFTA enables between Canada, the U.S. and Mexico reflects the truly integrated nature of the North American beef cattle industry. The U.S. is Canada’s top export market, accounting for 70 per cent of Canadian beef exports and nearly all our live cattle exports.

In 2016, Canada exported 270,000 tonnes of beef and 764,000 head of live cattle to the U.S. valued at more than $3 billion ($1.7 billion as beef and $1.4 billion live cattle). A further 16,000 tonnes of Canadian beef went to Mexico for $109 million, making Mexico Canada’s fourth-largest beef export market.

On the import side, Canadians purchased $978 million of U.S. beef and $19 million of Mexican beef in 2016.

“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,” the joint letter states.

The letter also encourages political leadership to reject efforts to use NAFTA as a platform to resurrect failed policies of the past, especially the misguided mandatory country-of-origin labeling (COOL) policy.

Colin Robertson, the Vice President of the Canadian Global Affairs Institute said lobbying efforts from both within the United States and from Canada and Mexico to salvage  NAFTA are showing results.

Robertson said trade is important to the U.S., especially to U.S. agriculture.

“The Canadian and Mexican efforts to point out that trade works well not just for Mexico and Canada but for the United States, I think, is starting to show some result,” he said.

Robertson remains optimistic.

He said Canadian efforts to remind the Americans of how much trade with Canada matters to the United States has had an impact.