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Hand-Wringing and Hand-Holding Ahead of NAFTA Talks

At nearly the same time Agriculture Secretary Sonny Perdue was calming fears of a downturn in U.S.-Mexico agricultural trade, some Mexican farm groups demanded that agriculture be left out of the “new NAFTA” negotiations that begin in 16 days. And Canada’s agriculture minister toured the Pacific Northwest saying open agricultural trade supports jobs and communities on both sides of the border.

Canada and Mexico account for 30% of U.S. agricultural trade. Since NAFTA took effect in 1994, U.S. food and ag exports to its North American neighbors have quadrupled, aided by duty-free access to the markets. U.S. farm groups fear the renegotiation will disrupt trade or that agriculture may become a bargaining chip for progress in other sectors. President Trump’s complaints about NAFTA have focused on manufacturing jobs and the balance of trade.

After a two-day meeting with Mexican Agriculture Minister José Calzada Rovirosa (shown left), Perdue (shown right) said, “I did not get any indication they are seriously considering” a shift to Argentina, Brazil, or other ag-exporting nations for corn and other farm imports. “I think, again, we have such productive and logistical advantages,” he said during a teleconference. One in every $7 in U.S. farm-export revenue comes from Mexico, a leading customer for corn, soybeans, beef, pork, and dairy.

U.S. corn sales to Mexico are down 7% compared to last year, and the trade group U.S. Grains Council says it has strong evidence that Mexican companies will buy seven or eight shiploads of South American corn in the weeks ahead. Soybean and poultry groups say Mexican customers are shopping around for alternative suppliers.

Perdue said he and Calzada discussed the issue of agricultural labor, adding that other parts of the Trump administration hold the lead position on immigration policy. “We are working on a new program that will provide a legal guest worker program,” said Perdue. U.S. farm groups say the H-2A guest worker program needs reform. They also argue that undocumented farmworkers should be given legal status. Up to 70% of farmworkers are believed to be undocumented.

Groups representing Mexico’s small farmers and farmworkers marched in Mexico City last week in opposition to NAFTA renegotiation. Their leaders said the talks would benefit big food processors and foodmakers such as Cargill, Nestlé, and Coca-Cola, but not small farmers, said Prensa Latina.

Some 1.3 million “workers in the agricultural sector — where a fifth of all Mexicans were employed at the time — were displaced” by NAFTA, said teleSUR, a media outlet that promotes “the unification of the peoples of the South.” The farm groups met Calzada with their demand that agriculture be left out of the talks. If it is not, they said they would collect signatures to force a nationwide referendum on NAFTA.

The visit by Canadian Agriculture Minister Lawrence MacAulay to Oregon and Idaho was part of a stream of appearances by Canadian leaders to highlight the importance of NAFTA to all sides, said The Western Producer, based in Saskatchewan. Canada is the top destination for ag exports from 29 states.

“Canadians and Americans really do benefit from agricultural trade,” MacAulay said in a statement. “This relationship provides greater access to well-priced, high-quality foods and supports millions of middle-class jobs and strong rural communities on both sides of our border.”

While the U.S. has targeted Canadian wheat, dairy, and wine regulations in its list of NAFTA objectives, Canada has not revealed its goals in public. Foreign Affairs Minister Chrystia Freeland is scheduled to appear before a parliamentary committee on trade on August 14, two days before negotiations begin. “She will be accompanied by unnamed Canadian trade officials,” said The Western Producer. “In the meantime, expect that cabinet ministers to continue visiting as many influential American policy makers as they can.”

Canada is the number two market for U.S. farm exports and the number two source of food and ag imports. Mexico is number three on the list of export markets and number one as a supplier of imports.

FERN’s Ag Insider. Produced by FERN
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