Washington, Oct. 11, 2017 – The past three rounds of negotiations to rewrite the North American Free Trade Agreement have been relatively calm when it comes to agricultural issues, but that’s expected to change as hundreds of U.S., Mexican and Canadian representatives converge in Arlington, Va., for the next five days.
A U.S. proposal to make it easier for fruit and vegetable farmers to file anti-dumping claims against Mexican exporters will likely be the first source of contention for ag negotiators as the fourth round of NAFTA talks opens Wednesday morning. The introduction of the proposal was one of the final things U.S. negotiators did during the Ottawa talks last month and it’s expected to be one of the first issues they address this week.
“The (Trump) administration is taking the position that there will be winners and losers and that’s not what farmers in Washington (state) want to see,” said Sen. Maria Cantwell, D-Wash., whose state is a major producer and exporter of apples and other tree fruits. “I’m concerned that for our ag sector, this could be a real loss.”
The proposal is aimed at appeasing mainly tomato and berry farmers in Florida and Georgia who have seen a flood of Mexican imports taking away their business and pushing down prices. Under current trade rules, farmers can only file anti-dumping suits if they can show damages across the entire country. The U.S. proposal would make an exception for perishable and seasonal crops.
That has U.S. apple, pear and other produce farmers concerned for several reasons, said Mark Powers, president of the Northwest Horticultural Council. Farmers in the Pacific Northwest export 20 percent of their pears and 15 percent of their apples to Mexico and Canada, and that makes them vulnerable to any trade disruption, Powers said.
If U.S. tomato farmers were allowed to more easily sue Mexico, that would likely mean Mexican or Canadian producers would get the similar ability to try to curtail U.S. apple exports.
That’s one possible direct impact from the U.S. proposal, Powers told Agri-Pulse. It also could set a precedent as the U.S. renegotiates other trade pacts and negotiates new agreements.
But it’s not just a question of the U.S. versus Mexico versus Canada, another produce industry leader said. It’s a lot more complicated because often fruits and vegetables coming into the U.S. from Mexico or Canada are grown and exported by U.S. companies with foreign investment.
“This could potentially disrupt the supply chain,” said the industry source, who asked not to be named because the details of the U.S. proposal have not been made public. “When you’ve got that going on, it further complicates the issue.”
Another contentious issue that negotiators are expected to deal with this week is the insistence by the Trump administration that Canada increase access to its market for U.S. dairy exports.
Canadian tariffs on U.S. dairy are as high as 300 percent, and most of the product that the U.S. ships there has to be eventually exported again after being processed. Furthermore, U.S. dairy farmers have become increasingly irate over Canadian pricing policies that effectively block some U.S. exports.
House Agriculture Chairman Mike Conaway, who recently led a delegation to Ottawa, was pessimistic about Canada’s willingness to negotiate on dairy access.
Canada, he said, will likely be hard to deal with because the country doesn’t want anything in return for lowering its dairy tariffs. The country’s supply management system, which cuts the country off from most international competition, makes milk more expensive for Canadians, but that doesn’t seem to be an issue.
Canada’s dairy lobby is very powerful, Conaway said, and it “has been very effective at continuing to convince Canadian consumers that it’s in their best interest to pay 160 percent of the price of milk in (the U.S.) – that there’s some sort of civic good from having that happen. Consumers have not risen up to stop that nonsense. If the consumers aren’t mad about it, it’s going to be hard to argue.”
U.S. Agriculture Secretary Sonny Perdue on Tuesday declined to say whether the U.S. would put forth a proposal to gain more access to the Canadian dairy market, but he did stress that there will be plenty of action during the Arlington talks.
“We’ll begin putting issues on the table,” Perdue said. “We’ve got specific things that we want to address (Wednesday) with Canada and Mexico, but I’ll leave that to (U.S. Trade Representative Robert) Lighthizer.”
Proposals to give more power to tomato and dairy farmers will please some, but Iowa Sen. Chuck Grassley says he’d prefer to see as little commotion as possible when it comes to agriculture issues under NAFTA.
“One thing I don’t want discussed is agriculture,” Grassley said about the NAFTA talks. “I want agriculture to be left alone.”
When pressed, Grassley said that debate over divisive agricultural issues may be unavoidable, but said he hopes that’s not the case.
“I’m expressing to you what I hope happens and I’m not denying that it can’t be talked about,” he said. “I’m just telling you the way Grassley sees it.”
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