The U.S., Canada and Mexico have agreed to at least two more rounds of negotiations to continue trying to rewrite the North American Free Trade Agreement. The principal negotiators announced today at the end of the sixth round of talks that some progress had been made, but the three sides were still at odds over many key issues and nowhere close to a comprehensive deal.
The past week of talks in Montreal was the last round scheduled, and concern was widespread that the U.S. might terminate the negotiations due to a lack of progress.
“To conclude, some real headway was made here today,” U.S. Trade Representative Robert Lighthizer said in Montreal. “We are committed to moving forward. I am hopeful progress will accelerate soon. We will work very hard between now and the beginning of the next round, and we hope for major breakthroughs during that period. We will engage with both Mexico and Canada urgently, and we will go where these negotiations take us.”
The next round will be held in Mexico later this month or early March, Canadian Minister of Foreign Affairs Chrystia Freeland told reporters today. The eighth round is now loosely scheduled to be held in Washington D.C., but dates have not been set.
The continuation of the talks is potentially good news for much of the U.S. ag sector, which has thrived under NAFTA. The trade agreement lowered virtually all tariffs on farm trade to zero between the three countries. Mexico is the largest foreign market for U.S. pork, corn, wheat, dairy and rice, while Canada is the largest buyer of U.S. barley and second largest buyer of U.S. ethanol.
That’s primarily thanks to NAFTA, the 24-year-old trade pact that has intertwined the three countries with supply chain and distribution networks.
“Just as farmers and ranchers have been among the biggest beneficiaries of NAFTA, they’d also be the ones to feel the most pain if America withdraws from the pact,” former Sens. Max Baucus and Richard Lugar, chairmen of the Farmers for Free Trade group, said last week as tension mounted over whether the talks would be extended or ended. “That’s because NAFTA withdrawal would result in a massive tax on the products American farmers grow and produce.”
The Trump administration agreed for now to keep the negotiations going, but Lighthizer stressed impatience today.
“We owe it to our citizens, who are operating in a state of uncertainty, to move much faster,” Lighthizer said. “Of course, negotiating as a group of three is more difficult than bilateral talks. Often, issues become more complicated and contentious when there are three parties.”
Some of that uncertainty is a result of repeated threats from President Donald Trump to pull the U.S. out of the trade pact, but some also comes from concern that Canada and Mexico continue to balk at demands being made by the U.S. One of those demands is that Canada dismantle its dairy supply management system that maintains tariffs as high as 300 percent on U.S. products.