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Trump Administration to Start NAFTA Renegotiation

WASHINGTON, May 18, 2017 – The Trump administration today informed Congress that it intends to officially begin renegotiating the North American Free Trade Agreement with Mexico and Canada.

The much-anticipated notification gives Congress a 90-day window to work with the Office of the U.S. Trade Representative, the Commerce Department and other agencies to help develop priorities in overhauling the pact with two of our largest trading partners.

Commerce Secretary Wilbur Ross, in a statement, blamed NAFTA for the downturn in U.S. manufacturing and promised that President Donald Trump would turn that around. “I look forward working with the President, Ambassador Lighthizer, and our counterparts from Mexico and Canada, to find a solution that is both fair and beneficial for all parties.”

USTR Robert Lighthizer said in a letter to Senate Finance Committee Chairman Orrin Hatch that the primary goal is to improve the 23-year old trade pact to include things like protections for digital trade and intellectual property rights, but many farm groups are concerned about protecting the trade advantages they have gained under NAFTA.

“Exports are one pillar of a strong farm economy, accounting for 31 percent of farmer income. Nowhere is the importance of trade stronger than right here in North America,” National Corn Growers Association President Wesley Spurlock said in a statement. “Since NAFTA was implemented, U.S. agricultural exports to Canada and Mexico have tripled and quintupled, respectively. We export billions of dollars of corn and corn products to these countries each year.”

Much of that success is because under NAFTA, most tariffs on U.S. agricultural exports have dropped to zero, a situation that farm groups like NCGA want to maintain.

The U.S. exported about $35 million worth of corn to Mexico in 1993, the year before NAFTA went into force, according to USDA data. Last year the U.S. sold $2.6 billion worth of corn to Mexico.

Wheat farmers also want to protect the gains they've made under the trade deal.

“If the administration intends on renegotiating NAFTA, it must guarantee growers that new terms won’t reverse the significant benefits for U.S. wheat farmers, like duty free access,” said David Schemm, president of the North American Wheat Growers. “Despite the risks, there’s an opportunity here to get better trade rules in place that will set the gold standard for trade agreements going forward, without hurting wheat farmers and their importing customers.”

But it’s not just U.S. farm groups asking the Trump administration to protect agricultural trade during renegotiations. The Canadian Cattlemen’s Association and Mexico’s Confederación Nacional de Organizaciones Ganaderas joined the U.S. National Cattlemen’s Beef Association in defending gains under 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,” leaders of major cattle-ranching groups in the U.S., Mexico and Canada said in a joint letter to Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto. “Recent statements about the possible dissolution of NAFTA or potential renegotiation of NAFTA are deeply concerning to us because of the unnecessary risk it places on our producers,”

Lighthizer, during his March 15 confirmation hearing before the Senate Finance Committee, said he would do his best to protect what farmers have gained under NAFTA under any renegotiation.

“We have to be careful not to lose what we gained … I do believe it can be done,” he told lawmakers at the hearing. “I’m not suggesting that it will be easy, but I do believe it can be done.”

Written by Bill Tomson for Agri-Pulse Communications. 

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