WASHINGTON, July 17, 2017 – Maintaining the duty-free status on U.S. agricultural exports to Mexico and Canada is one of the key objectives for U.S. negotiators as they prepare to begin renegotiating the North American Free Trade Agreement, according to a list of goals published today by the U.S. Trade Representative.
That’s welcome news to the U.S. agriculture sector, which sells about $19 billion worth of corn, soybeans, wheat, dairy, pork, beef, sorghum, potatoes and other farm commodities yearly to Mexico.
“Because NAFTA helped make Mexico one of the most important export markets for U.S. wheat, our main priority right now is to do no harm to wheat trade,” said David Schemm, president of the National Association of Wheat Growers (NAWG). “We are happy to see that the objectives call for maintaining existing reciprocal duty-free market access for agricultural goods. Mexican buyers import more of the wheat my neighbors and I grow than any other country and we can’t afford to risk interrupting that positive relationship with our customers.”
Beyond keeping the “existing reciprocal duty-free market access for agricultural goods” the 18-page Summary of Objectives for the NAFTA Renegotiation also highlights the need to “eliminate non-tariff barriers to U.S. agricultural exports” as well as “promote greater regulatory compatibility to reduce burdens associated with unnecessary differences in regulation.”
Those goals could help out U.S. dairy farmers, who are outraged over Canadian pricing policy that hobbles U.S. exports of cheese and other products.
The USTR’s plan also asks negotiatiors to set up a method to prevent sanitary and phytosanitary barriers from blocking U.S. agricultural exports. It’s those kinds of barriers that have been holding the U.S. potato industry from expanding exports to Mexico.
Mexico does not ban U.S. potatoes, but only allows exporters to ship the spuds to destinations within 26 kilometers of the border. Mexico has argued that the arcane phytosanitary barrier is needed to block potatoes that could carry disease and end up in the supply of seed potatoes instead of factories that produce French fries and potato chips.
“If potatoes can be shipped safely to the 26-kilometer area, they can be shipped safely to other areas of Mexico,” National Potato Council CEO John Keeling told Agri-Pulse in a recent interview.
It’s not just farm groups that are applauding the NAFTA negotiating plan. House Agriculture Committee Chairman Mike Conaway gave the objectives a thumbs-up.
“The administration’s objectives for renegotiating NAFTA clearly demonstrate a commitment to protecting existing market access while outlining several ways to level the playing field,” Conaway said in a statement. “I’m looking forward to working closely with the administration to achieve the best deal possible for American agriculture.”
The new NAFTA plan stresses that the Trump administration wants to “update and strengthen the rules of origin” when it comes to products made in the U.S. in order to “incentivize the sourcing of goods and materials” from the U.S.
But it does not specifically seek to reinstate Mandatory Country of Origin Labeling (MCOOL) on Canadian and Mexican beef and pork, eliciting a sigh of relief from the National Cattlemen’s Beef Association.
The U.S. first implemented the labeling law in 2009 and then again in 2013 with stricter provisions, but Canada and Mexico won a decision from the World Trade Organization that the law was unfair. The U.S., facing steep retaliatory duties, scrapped the labeling law.
“As we learned from history, MCOOL failed to deliver higher values for producers or a safer food supply,” NCBA President Craig Uden said. “It did, however, result in further consolidation in the U.S. beef industry and the potential for $1 billion in retaliatory tariffs from Canada and Mexico. We must learn from the mistakes of the past, not repeat them.”