After rattling the nerves of the farm sector, President Trump said, “[W]e’re going to give renegotiation a good strong shot,” rather than abandoning the North American Free Trade Agreement. “I decided rather than terminating NAFTA, which would be a pretty big, you know, shock to the system, we will re-negotiate,” Trump told reporters while meeting Argentine President Mauricio Macri.
“Now, if I’m unable to make a fair deal, if I’m unable to make a fair deal for the United States, meaning a fair deal for our workers and our companies, I will terminate NAFTA. But we’re going to give renegotiation a good, strong shot.”
NAFTA “has been a horrible deal for the United States” while benefiting Canada and Mexico, said the president, a view he regularly expresses. “Well, I was going to terminate NAFTA as of two or three days from now,” he said, but decided after telephone conversations with his NAFTA counterparts to improve the trade pact.
The largest U.S. farm group thanked the White House for choosing renegotiation over withdrawal. “As you know, overall, NAFTA has been overwhelmingly beneficial for farmers, ranchers and associated businesses all across the United States, Canada and Mexico for decades,” said president Zippy Duvall of the American Farm Bureau Federation in a letter. “Walking away from those gains would have been a severe blow to the agricultural sector and we appreciate the path that will allow for reform and enhancement, rather than abandonment of past achievements.”
Agriculture Secretary Sonny Perdue said Trump’s zigzagging statements about NAFTA are part of Trump’s deal-making approach as a successful businessman, reported Harvest Public Media. “So saying something was contemplated is not necessarily saying something was done or was going to be done,” Perdue said while visiting a USDA facility in Kansas City. “I think the ultimate outcome is what we’re interested in.” Perdue also said Trump “has to send a signal…that he’s serious about re-negotiating NAFTA.”
U.S. farm exports to Canada and Mexico have zoomed to $38 billion in 2016 – 29 percent of total sales – from $8.9 billion in 1993. “We strongly caution against any actions that would lead to a re-imposition of tariffs or other barriers to agricultural trade with our NAFTA partners,” said the Farm Bureau.
“U.S. engagement in constructive, substantive negotiations with Canada and Mexico as soon as possible should be the singular priority and focus regarding NAFTA,” said the U.S. Food and Agriculture Dialogue for Trade, a coalition of 130 food and agriculture trade groups. “Building on our food and agriculture exports to Canada and Mexico is essential to meeting the Trump administration’s economic growth targets.”
If NAFTA is discarded, Mexico could, under WTO rules, impose a tariff of up to 37 percent on U.S. corn, said the New York Times. Mexico is the No. 3 market for U.S. farm exports, including corn, soybeans, pork and dairy. Canada is the second-largest customer.
During his campaign, Trump put NAFTA at the top of his agenda for action. The administration has yet to begin the formal process of renegotiation, a delay often attributed to a desire to have Robert Lighthizer in place as U.S. trade representative although Trump has put Commerce Secretary Wilbur Ross in charge of trade. Early this week, Ross said Congress needed to pass so-called fast-track authority to assure a prompt yes-or-no vote on trade agreements.
Trump’s statements about renegotiating NAFTA followed published reports that the administration was preparing a statement of withdrawal.