NAFTA renegotiations could mean modernization but could open the door to problems for agriculture.
North American Free Trade Agreement (NAFTA) renegotiations are under way. With Rounds 1 and 2 already in the books, the goal is to finalize the agreement by the year’s end. Many in agriculture, especially the American Farm Bureau Federation (AFBF), the Canadian Federation of Agriculture (CFA) and Mexico’s Consejo Nacional Agropecuario (CNA), believe NAFTA has exponentially grown reciprocal trade between the three countries.
On Aug. 16 leaders from the three national organizations –– Zippy Duvall, AFBF; Ron Bonnett, CFA; and Bosco de la Vega, CNA –– sent a joint letter to negotiators. The letter outlined NAFTA’s successes for agriculture and five ways the three countries can increase agricultural trade volumes. Negotiators were encouraged to consider the following:
- seek increased and improved regulatory alignment;
- improve the flow of goods at border crossings;
- further align sanitary and phytosanitary measures;
- eliminate technical barriers to trade; and
- adapt the agreement to technological advances since the implementation, such as digital trade, etc.
Following the ceremonial signing of the letter, Duvall, Bonnett and Vega commented in a press conference on the progress the three countries have made regarding trade during NAFTA and their hopes for its future.
Duvall started the conversation by encouraging negotiators to recognize the benefits trade deals and open markets offer farmers and ranchers and the communities they live in, do business in and raise their families in. Secondly, he urged all parties to enter talks “with cool heads and focus on the common goals that we have.”
“Our stand is that we do no harm,” emphasized Duvall. “This has been a good trade treaty for North American agriculture from Mexico to Canada. We want to make sure that we have our voice heard loud and clear, that we don’t want to harm the gains that we’ve had in it.”
Duvall stated when President Trump called for fair trade treaties for America, he also called for fair trade treaties for all North American people.
“I don’t see him doing harm to this treaty that has been good for agriculture,” he said.
In NAFTA’s lifetime, U.S. exports have grown, reported Duvall, but the treaty isn’t perfect, and the three leaders were quick to recognize its dispute-resolution problems.
“Let’s have some rules around this trade treaty that would have swift decisions on how we solve these problems because days and time mean money to our farmers. … We’ve got to bind together as a region. We’ve got to discuss what our problems are with each other. We’ve got to find solutions, and do it quickly,” Duvall stated.
The AFBF president wants the treaty to be completed quickly.
The U.S. farm economy is not good in America right now, he said, and uncertainty doesn’t help anybody. Duvall called for the modernization of NAFTA to happen and told negotiators to get it done fast, so farmers can be prepared to plant next year’s crop.
Bonnett emphasized the “do no harm” principle regarding NAFTA.
“For agriculture, NAFTA has been good. If we look at the changes since 1994, trade between the three countries has grown exponentially,” he said.
Items for update
He gave examples of what some of the joint letter’s four bullet points should look like:
- harmonizing regulations for approval of pesticides and herbicides;
- making sure the scientific processes are the same for approval in all three countries;
- an inspection approved in one country is accepted by the other two; and
- streamlining border crossings, especially concerning perishable products, suggesting preapproved clearance, pre-inspection and/or electronic filing.
Bonnett promised to ensure the concerns of farmers and ranchers in all three countries would be heard throughout negotiations. He also encouraged the negotiators to build on the confidence of the trading relationship — especially when in the public light.
He said, “[Do] not undermine that confidence, because every day we have farmers and ranchers that are shipping product back and forth across the border, trading with each other. Anything that undermines that could really hurt the economy and hurt the long-term planning for how we move ahead.”
Vega shared that he is the third generation of Mexican growers who have always had an American or Canadian commercial partner.
“We understand that primary production is vital for the economy of the three countries,” he stated.
Vega ensured he has made clear to the Mexican government that agriculture is not to be an exchange coin for any other economic activity. He added by maintaining competition in the markets and stronger ties in North America, the region is better prepared to be successful in new markets in Asia, South America and Europe.
Many of the dispute problems within NAFTA arise between the United States and Mexico, and Vega was quick to share his opinion on the matter.
“Mexico wants free trade within the rules of commerce, talking about a topic in a transparent way and based on science,” he said. “We are agreed that our country maintains the 19th chapter in controversial solutions. In the labor topics, we consider that each country should be addressing their own things. Mexico has an agreement with the International Labour Organization and is working very hard in all this process.”
One of the reasons many have said it is crucial for NAFTA renegotiations to be concluded by the end of the year is because of Mexico’s national elections, set for early 2018. Vega addressed this concern by offering two plans of action: First, conclude the renegotiation or disorganization of the agreement as soon as possible.
Second, if agreement is not reached before Mexico’s national elections, Mexico will continue to operate under NAFTA as long as it is in effect.
It is clear that all three agricultural leaders see NAFTA as a profitable avenue for farmers and ranchers in North America. Each has made it staunchly clear to their respective trade ministers and representatives that agriculture is not and should not be a trading card in the renegotiation of the agreement. With Round 2 now completed, free trade’s fate between Canada, the United States and Mexico is ever closer to being decided. For AFBF, CFA and CNA, the “do no harm” principle has clearly been embraced.
Source: American Angus Association