WASHINGTON, Aug. 16, 2017 - The top U.S. trade negotiator opened the historic renegotiation of the North American Free Trade Agreement by bluntly warning that the pact has “fundamentally failed many, many Americans” despite its benefits to farmers and border communities and needs “major improvement.”
President Trump “is not interested in a mere tweaking of a few provisions and a couple of updated chapters,” said U.S. Trade Representative Robert Lighthizer, raising the stakes for the negotiations. The first round of talks run through Sunday at a Washington hotel.
Before laying out Trump’s specific complaints about NAFTA and demands for changes, Lighthizer acknowledged that exports to the Mexico and Canada were important to U.S. agriculture.
“For many of our farmers and ranchers, Canada and Mexico are their largest export markets. Americans send billions of dollars of corn and soybeans, and poultry across our borders to dinner tables throughout North America,” Lighthizer said.
“These are hardworking people with families who ask little from their government. Many are particularly vulnerable today because of low commodity prices.”
Lighthizer also noted that communities along the border with Canada and Mexico also had benefited from increased trade under NAFTA. But, he said, “for countless Americans, this agreement has failed.
“We cannot ignore the huge trade deficits, the lost manufacturing jobs, the businesses that have closed or moved because of incentives - intended or not - in the current agreement,” he said.
In an apparent reference to the U.S. dairy industry complaints about Canadian barriers to American-produced ultra-filtered milk, Lighthizer said one of the core U.S. objectives is to “assure that there is equal access and reciprocity in government procurement and agriculture.”
American farm leaders have been nervously awaiting the start of the negotiations for months, fearing that even uncertainty about the outcome of the talks could cost U.S. market share.
At a joint news conference later Wednesday, leaders of the largest farm groups in the United States, Mexico and Canada echoed Lighthizer's "do no harm" while urging the negotiators to make improvements that could smooth border crossings, eliminate duplicate inspections, and streamline approval processes for farm inputs. The leaders also signed a joint letter to negotiators for the three countries.
Zippy Duvall, president of the American Farm Bureau Federation, said he was concerned that Lighthizer attacked NAFTA "up front" as the negotiations started Wednesday. But Duvall also expressed conference that Trump wouldn't agree to revisions in the agreement that would hurt U.S. farmers. "We played a major role in getting him elected. ... I don’t see him doing harm to this treaty that has been good for ag," Duvall said.
Ron Bonnett of the Canadian Federation of Agriculture and Bosco de la Vega of Mexico's National Agricultural Council both said they were encouraged that Lighthizer mentioned the benefits to agriculture. "It was very much singled out that ag was very much a shining example of how success could work," said Bonnett. De la Vega said, speaking through a translator, "I think that’s a very good signal from the beginning for the coming negotiations for our countries."
In sharp contrast to Lighthizer, his counterparts from Mexico and Canada gave opening statements Wednesday that praised the existing agreement while acknowledging a need to update in light of economic and technological changes.
“Mexico believes that NAFTA has been a strong success for all parties, and we also agree that there is room for modernization in order to make this agreement even more successful,” said Mexican Economy Secretary Ildefonso Guajardo Villarreal. “This issue is not tearing apart what has worked, but rather how we make our agreement better.”
Guajardo, sitting to the left of Lighthizer and the U.S. team, also quoted a remark Lighthizer made to Congress in which he said the U.S. objective “is to first of all, do no harm.”
Canadian Foreign Affairs Minster Chrystia Freeland said trade flows under NAFTA have been “balanced and mutually beneficial.”
“We want to protect NAFTA’s record as an engine of job creation and economic growth” while updating its provisions to “cut red tape for businesses and to harmonize regulations.” She also emphasized that Canada will insist on provisions to protect workers and the environment as well as gender rights and indigenous people.
The talks are expected to take several months, but U.S. negotiators said they planned to present a significant amount of proposed text during this week’s discussions. Areas of disagreement between the three countries are put in brackets. The proposed text will not be released to the public and the negotiations are held behind closed doors.
Bill Reinsch, a trade adviser at Kelley Drye and Warren and former president of the National Foreign Trade Council, said he didn’t expect the U.S. negotiators to agree to anything that would harm U.S. farm exports.
“The issue for the ag community will be how ambitious the U.S. will be in gaining new opportunities, either in market access in areas like dairy” or in seasonally produced fruits and vegetables, Reinsch said. ”I don't think we have a lot to offer there, except maybe more access to our market in sensitive sectors.”
Florida tomato growers and some other producers of regionally grown commodities are hoping the proposed U.S. text will include provisions to make it easier for them to bring antidumping cases against Mexican competitors.
De la Vega, the Mexican farm leader, told reporters that Mexican grain and livestock producers had been hurt by competition from the United States. "We’re receiving a very important volume of meat and grains" from the United States, he said.
Bonnett, a cow-calf producer in Ontario, said Canadian farmers "stand by" their government's resistance to changing its dairy supply management program.