The White House cleared the way to begin renegotiation of NAFTA as early as Aug. 16 by listing its goals for the talks; in short, “The new NAFTA must continue to break down barriers to American exports.” The administration scored Canada for blocking access to its dairy, wine and grain markets, “barriers that the current agreement is unequipped to handle.”
U.S. farm groups were pleased the first item on the administration’s checklist for agriculture was “maintain existing reciprocal duty-free market access for agricultural goods.” Since NAFTA took effect in 1994, Canada and Mexico blossomed in importance to U.S. farmers. The North American neighbors account for one-third of U.S. food and ag trade.
“As we have said before, it is difficult to improve upon duty-free, unlimited access to Canada and Mexico – and we are pleased that USTR’s objectives for NAFTA include maintaining reciprocal duty-free market access for agricultural goods,” said president Craig Uden of the National Cattlemen’s Beef Association. The wheat industry said it was happy the administration gave priority to duty-free exports and said negotiations were a chance to win fair treatment of wheat shipped to Canada.
The 18-page summary of U.S. goals was light on details. The section on agriculture, for example, was one-half page, followed by one-half page for sanitary and phyto-sanitary standards, the safety rules that often figure in disputes over food exports. In the early weeks of his administration, President Trump made Mexico this chief NAFTA target, shifting later to attack Canadian dairy and lumber trade. Both are long-time irritants.
“The section on agricultural goods does not explicitly target Canada’s supply management system for dairy, poultry and eggs,” said CBC News, “but the Trump administration is seeking to eliminate non-tariff barriers to U.S. agricultural exports, including ‘restrictive administration of tariff-rate quotas, other unjustified measures that unfairly limit access to markets to U.S. goods, such as cross subsidization, price discrimination and price undercutting.'”
U.S. negotiators also will seek reduction or elimination of the remaining tariffs on agricultural products, according to the list of goals.
“The new NAFTA will be modernized to reflect 21st Century standards and will reflect a fairer deal, addressing America’s persistent trade imbalances in North America,” says the summary.
According to USDA’s most recent estimates, Canada and Mexico will buy $39.5 billion of U.S. ag exports and send $44.2 billion of the good to U.S. customers during the fiscal year that ends on Sept 30, roughly similar to the previous year. Mexico agreed a few weeks ago to continued limits on its shipment of sugar to the U.S. market.
U.S. farm groups asked for a “do no harm” approach by the administration to the agricultural provisions of NAFTA because of the huge share of ag exports that go to Canada and Mexico.
House Agriculture chairman Michael Conaway said the administration’s list of goals “clearly demonstrate a commitment to protecting existing market access while outlining several ways to level the playing field” for agriculture.