NAFTA Clock Is Ticking, Vetter Says
There’s too much left to do before the deadline for renegotiation of the North American Free Trade Agreement, a former U.S. trade representative told Agriculture.com.
The most recent NAFTA talks were held in Montreal last month. The negotiations are scheduled to be completed by the end of March.
On Monday, Darci Vetter, formerly the chief agricultural negotiator for the U.S. trade representative in the Obama administration and diplomat in residence at the University of Nebraska-Lincoln, says the talks have a long way to go.
“Personally, I think there is a lot of work to be done,” says Vetter. “There is still not even an approach to some issues. There are some technical issues, like the rules of origin, that are really complicated to advance.”
Though weekly USDA export reports indicate that Mexico is still a top buyer of U.S. corn, Vetter sees the in-roads that other countries have made with Mexico since the NAFTA talks started, and that may be the most damaging.
“There should be a real concern about Mexico’s purchasing habits,” Vetter says.
Vetter noted that before NAFTA there was not a lot of competition for the U.S. as an ag supplier. A whole infrastructure was built to export goods into Mexico.
“Now we have competitors like Australia, New Zealand, Argentina, and Brazil. They aren’t very reliable, but they can take part of our exports,” Vetter said.
She added, “Imagine if our share of corn exports lowers to 90%, then to 80%. We already have plenty of corn, and it is really hard to find another buyer.”
In fact, Brazil’s official data reveals that the country exported 1.2 million metric tons of corn in 2017, compared with zero in 2016; 320,000 tons in 2015; and 160,000 tons in 2012.
Adding to the possible delays in getting the trade talks wrapped up on time, Vetter highlighted the fact that Mexico will face elections this year followed by the coming elections of the U.S.
Vetter admits that her successor, U.S. Trade Representative Robert Lighthizer, has a tough job to do.
“The agricultural sector is always hard to negotiate. I hope the Senate gets him onboard quickly. Agriculture always has the safety issues. Part of the job of the person is to paint a picture of the different regions, the different jobs, then you pave the way for a negotiation that works for the overall economy,” she explained.
Vetter affirmed she “can’t say it is a surprise” that China recently moved to implement an anti-dumping investigation on U.S. sorghum, and that some traders canceled recent purchases of U.S. GMO corn.
“I had heard from a number of sources that if the U.S. hit the Chinese with industrial trade penalties, China would hit American agricultural products,” analyzed the former official.
On the subject of opening up India’s market to U.S. soybeans, Vetter described the potential in the fastest growing economies in the world and its great appetite for food products.
“The Indian market is very tough to negotiate with. With India, there is a lot of work that has to continue. You have to deal with all of the bilateral issues and take the sanitary and phytosanitary steps,” she said.
Trans-Pacific Partnership Return Unlikely
Along with trying to renegotiate NAFTA, the Trump administration has indicated a possible return to the Trans-Pacific Partnership (TPP).
In 2017, President Trump pulled the U.S. out of the international trade pact.
Regarding a possible return of the U.S. for the Trans-Pacific Partnership, she highlighted the difficulty of those negotiations and the time that they require. “I don’t see the TPP 11 waiting for us to reengage. We have to push it really really hard,” Vetter concluded.
The 11 countries involved in a new TPP agreement without the U.S. are Japan, Australia, Canada, Mexico, Singapore, Malaysia, Vietnam, Chile, Peru, New Zealand, and Brunei.