President Trump’s repeated threats to scrap NAFTA are creating uncertainty in the Farm Belt, where ag exports are a key source of income, and may undermine U.S. negotiating power in other parts of the world, said farm group leaders. NAFTA partners Canada and Mexico account for one-third of U.S. agricultural trade.
“The rhetoric in public, we don’t think it is helpful,” said Tom Stenzel, president of the United Fresh Produce Association. “It is very disruptive to business planning.’ Customers in Mexico are lining up alternative suppliers in case the United States withdraws from the free trade pact, he said.
NAFTA negotiations are scheduled to resume Nov. 17 in Mexico City after a one-month pause. At the end of an October session in Washington, U.S. trade representative Robert Lighthizer said the United States is determined to eliminate trade deficits and expressed his disappointment at resistance to U.S. proposals. Trade leaders from Canada and Mexico said the United States wanted unfair concessions. The monthlong recess in talks was intended to give the nations time to consider what can reasonably be accomplished in the ongoing negotiations. Trump campaigned on a promise to withdraw from NAFTA but was persuaded to try negotiations first.
Leaders of eight farm and ag trade groups met with three dozen members of the House Agriculture Committee to discuss the outlook for NAFTA. Agricultural trade boomed under NAFTA, and now farm groups worry they will be caught in a crossfire over non-farm issues, like factory jobs.
“We’re hearing from our members,” said Nick Giordano of the National Pork Producers Council. “I have never seen producers so worked up.” President Zippy Duvall of the American Farm Bureau Federation said the grassroots membership of the largest U.S. farm group is calling for action. “They are leading the conversation,” said Duvall. “We still have faith we’re going to get something done.”
House Agriculture Committee chairman Michael Conaway said he was “very concerned” about the possibility of U.S. withdrawal. “I think that’s the wrong answer.” Conaway said farm-state lawmakers have stressed to Commerce Secretary Wilbur Ross and Lighthizer the importance of continued duty-free access for U.S. farm exports to Canada and Mexico. Conaway referred to the farm sector’s goal of “do no harm,” then said of the negotiations, “It’s not a done deal.”
The administration, with the support of farm groups, has called for Canada to end its supply management system for dairy, poultry, and eggs. Minnesota Rep. Collin Peterson, the Democratic leader on the Agriculture Committee, said after meeting with Canadian dairy negotiators, “Don’t bet the ranch on getting anything done,” adding that Quebec, the home of the Canadian dairy industry, “is like south Florida” — important and often decisive in state and national politics.
Conaway and the ag leaders said Lighthizer is shorthanded as he pursues U.S. trade goals, particularly the administration’s preference for bilateral trade agreements — where it would have more leverage — over multilateral pacts. U.S. competitors such as the European Union are actively negotiating with countries that were part of the 12-nation Trans-Pacific Partnership, spurned by Trump, while the United States is tied up in NAFTA.
Tom Sleight of the U.S. Grains Council said other nations might be reluctant to negotiate with the United States if its withdrawal from the TPP is followed by chaos over NAFTA. “Ag trade has a long memory,” he said.