A coalition of 100 companies and trade groups representing the U.S. food and agriculture sector says it supports President Trump’s goal of modernization of NAFTA but, “we encourage NAFTA negotiations to continue without the threat of withdrawal.” Trump has repeatedly threatened to scrap the tri-national trade agreement and Commerce Secretary Wilbur Ross said Canada and Mexico have more to lose than the United States if there is a rupture.
In a letter to U.S. state governors, the NAFTA Food and Ag Trade Group asked the state executives to tell the White House that they want a new NAFTA that enhances food and agricultural trade. Canada and Mexico account for one-third of U.S. agricultural trade.
If the United States announced withdrawal, commodity prices would suffer, “contracts would be renegotiated or cancelled, sales would be delayed or lost altogether, able foreign competitors would rush to seize our export markets, and litigation would abound,” says the letter. One economic analysis says the farm sector would take a $13 billion hit if withdrawal actually occurred.
During a recent visit to California, USDA Secretary Sonny Perdue reassured worried farmers that they could plan on a better version of NAFTA. But in a meeting in Modesto, dairy producers told Perdue that without NAFTA they might as well close shop as Mexico is a large market for U.S. dairy products, says Western Farm Press.
“Before NAFTA there were virtually no dairy products exported from the U.S.,” a dairyman from Escalon, Calif. told the Secretary. “Now about 15 percent of our production is sent out of country with Mexico our No. 1 customer.”
Almond grower and processor Dave Phippen said the “trade agreements are vital to our industry,” referring to the fact that 70 percent of California’s almond crop is exported every year.
“I think we’re going to get a NAFTA deal in the end,” Perdue told the farmers.
Some NAFTA negotiators are to meet today in Mexico City, ahead of the formal resumption of talks on Friday. Mexico has said it is preparing its response in case negotiations stall. Perdue said last week that USDA is making contingency plans.
Canada “plans to stand firm against U.S. protectionism. It may give, however, on matters of red tape, e-commerce and coveted access to the dairy market,” said the Globe and Mail, based in Toronto. The United States has pressed for elimination of Canada’s supply management system for dairy, eggs and poultry.
At a Wall Street Journal CEO forum, Ross said he hoped Canada and Mexico “will come to their senses and make a sensible deal,” reported Reuters. Ross continued, “In any negotiation if you have one party that is not in fact prepared to walk away over whatever are the threshold issues, that party is going to lose.” Ross said “some sort of a draft (NAFTA deal) will land” on Trump’s desk.