The Trump administration intends to preserve U.S. access to markets in Mexico and Canada, says a draft of the letter to Congress that would trigger renegotiation of the North American Free Trade Agreement. The eight-page draft, which is open to revision, says a key goal in agricultural discussions will be removal or reduction of non-tariff barriers to U.S. farm goods and “unjustified trade restrictions that affect new U.S. technologies, including biotechnology.”
Mexico has banned the planting of genetically engineered corn, even in test plots.
Canada and Mexico are the second- and third-largest markets for U.S. farm goods and the two leading sources of U.S. food and agriculture imports. Exports provide 20 percent of U.S. farm income so farm groups are worried about painful disruptions in sales if trade talks blow up. Already, Mexico has threatened to find other corn suppliers, rather than lean on the United States.
In the draft, the Trump administration says a persistent trade deficit in goods “demands that this administration take swift action to revise this relationship … We expect to obtain results that improve on previously negotiated outcomes.”
As a candidate, Trump said he would get better terms in a NAFTA renegotiation or walk away from the three-nation pact. The draft letter points to a more modest set of goals, said U.S. News. The president directed his strongest criticism of NAFTA toward Mexico.
The draft letter lists four points for action on agriculture and sanitary and phytosanitary measures. The first is to reduce or eliminate non-tariff trade barriers to U.S. agricultural exports, “including permit and licensing barriers, restrictive administration of tariff-rate quotas, unjustified trade restrictions that affect new U.S. technologies, including biotechnology, and other restrictive measures. Two deal with removal of trade barriers created by unfair sanitary and phyto-sanitary rules. The fourth is to maintain U.S. rights to carry out food aid, market development and export credit programs.
The administration would trigger NAFTA renegotiation by sending the letter to Congress and starting a 90-day period of internal consultations. “NAFTA negotiations will use all the facts available to them at the time,” said Commerce Secretary Wilbur Ross.
Trump was expected to sign an executive order today that calls for a systematic country-by-country and product-by-product examination of trade deficits and their causes. “It will form the basis for decision-making by the administration,” said Ross.
To read the draft letter, click here.