As negotiators prepare to meet next week in Montreal, Canada for another round of North American Free Trade Agreement (NAFTA) modernization talks, the U.S. meat industry remains steadfast in advocating a “do no harm” approach to agricultural trade. Our passionate defense of NAFTA comports with the Trump Administration’s vision of a more equitable deal for Americans and a prosperous U.S. economy, and is aimed at helping the Administration achieve that vision. As the largest sector of agriculture, the meat industry views open and fair trade policy as the fuel in American agriculture’s economic engine.
Because these negotiations are critical, we welcome improvements to the 23 year old pact that will more effectively address existing and emerging challenges and opportunities in today’s interconnected, digitized global trade environment. A successful modernization, though, must preserve the core tenets of the agreement that yielded highly integrated supply chains in the meat and livestock industries and exponentially expanded meat trade within the North American market in the past two decades.
The evidence underscoring NAFTA’s boon for the U.S. meat industry is irrefutable.
Since its entry into force in 1994, U.S. beef exports to Canada and Mexico grew from $656 million to more than $1.7 billion in 2016, while pork exports increased in value from $322 million to more than $2 billion during that same time period. In terms of volume, Canada and Mexico imported 27 percent of total U.S. beef exports and 40 percent of all U.S. pork exports in 2016 – figures that would have been unattainable without NAFTA.
Mexico and Canada are now top-four destinations for U.S. beef and pork. In fact, Mexico is the leading destination for U.S. beef variety meat, and in 2016, U.S. pork exports to Mexico set a fifth consecutive volume record, totaling 730,316 metric tons.
Behind these numbers are the hardworking meat industry employees whose livelihoods depend on a robust NAFTA. Many experienced rising incomes, additional job opportunities and stronger local economies – goals the industry and Administration share – following NAFTA implementation. Moreover, consumers in all three countries now enjoy the safest, highest-quality meat supply in the world.
Renegotiation efforts must, therefore, preserve these gains, many of which were made possible through NAFTA’s zero-tariff market access for U.S. meat products in Canada and Mexico. Protecting and building upon this preferential access is essential to the continued strength and future growth of an industry that accounts for 5.6 percent of gross domestic product and supports 5.4 million jobs. This will better position the industry to withstand stiff global competition from increasingly strong competitors like the European Union and Australia.
The ability to sustain this momentum in the meat sector depends upon negotiators’ commitment to remove remaining technical and non-tariff barriers that undoubtedly undermine U.S. exports. This includes updating NAFTA’s sanitary and phytosanitary (SPS) chapter to ensure science-based SPS measures are developed and implemented in a transparent, predictable and non-discriminatory way, including adoption of enhanced enforcement mechanisms to counter unjustified SPS barriers.
The negotiations also present a real opportunity to promote regulatory cooperation and convergence of mutually recognized standards, like the establishment of a common “window” for an E-document transmission and communication system in the NAFTA region to facilitate review and clearance of meat shipments crossing common borders. Such a system would greatly improve border-crossing times by cutting unnecessary red tape and avoiding routine inspection issues.
Maintaining consistent standards for animal health certification and adopting enhanced intellectual property rights that prevent misguided restrictions on commonly used meat terms in agricultural trade would further advance efforts to align regulations.
Reconciling and reducing existing regulatory impediments will simultaneously lower production and shipping costs and enhance food safety and animal health in the North American market – an outcome that will benefit U.S. businesses and consumers, alike.
We remain optimistic the Administration’s commitment to American agriculture and its track record of eliminating onerous regulatory burdens will produce an agreement that facilitates cooperation with our closest trading partners; accelerates U.S. economic growth; and further deepens, not restricts, cross-border trade in livestock and meat products, which exceeds $16 billion annually.
Moving forward, let’s remain positively engaged in a constructive dialogue that safeguards the core policies that have strengthened the U.S. meat sector and overall economy, while seizing opportunities to forge an agreement that improves outcomes for all Americans.
About the Author: Barry Carpenter is president and CEO of the North American Meat Institute, the nation’s oldest and largest trade association representing packers and processors of U.S. beef, pork, lamb, veal, turkey and processed meat products.