As the second round of discussions regarding changes to the North American Free Trade Agreement (NAFTA) wrap up this week, U.S. and Washington representatives from the agricultural sector are voicing what they hope to see in a reworked agreement.
Tensions are high as President Donald Trump has indicated the possibility of withdrawing the U.S. from NAFTA entirely. In response, the Mexican government vowed to leave the agreement if the U.S. follows through.
Among the U.S. objectives for an improved NAFTA are keeping agricultural products tariff-free and reducing other limitations on ag exports.
However, Trump tweeted last month that the U.S. might scrap NAFTA entirely.
We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada.Both being very difficult,may have to terminate?
— Donald J. Trump (@realDonaldTrump) August 27, 2017
In response to Trump’s tweet, the Mexican government indicated it would not continue NAFTA negotiations if the U.S. began its departure from the agreement.
“I think anytime you have to take those kinds of comments seriously, that’s concerning,” Mark Powers, president of the Northwest Horticultural Council (NHC), told Lens.
“At the end of the day it has to work for everybody, otherwise there is no point,” he added. “But it is concerning and it would be harmful, not just unfortunate, if the U.S. were to actually withdraw from NAFTA.”
The first rounds of negotiations took place August 16-20 in Washington, D.C. During those initial talks, United States Trade Representative (USTR) Robert Lighthizer indicated a push by the Trump administration to completely overhaul the agreement.
“We feel that NAFTA has fundamentally failed many, many Americans and needs major improvement,” he said. “I want to be clear that he is not interested in a mere tweaking of a few provisions and a couple of updated chapters.”
The second round of talks began in Mexico City, Mexico on September 1, and will run until September 5.
Moving into the second phase of negotiations, there haven’t been any indications of increasing tariffs on agricultural products, according to Powers.
However, a section under the “Trade Remedy” section of objectives may prove harmful if handled the wrong way, he added.
Powers said he worries the NAFTA provisions on countervailing and anti-dumping could be updated in a way that would harm Washington growers and producers, as the move could hinder the U.S.’ ability to ship fruits and vegetables to Mexico and Canada.
Powers told Lens he is optimistic that negotiators will keep the needs of the state and country’s agriculture industry in mind as discussions continue.
“The commitment on the part of U.S. Department of Agriculture (USDA) and I believe of other countries as well is to ‘do no harm,’ which is the catch phrase that you hear often applied to agriculture,” said Powers.
Both Lighthizer and the USDA Secretary Sonny Perdue share this goal, he added.
“They recognize NAFTA has been very beneficial for U.S. agriculture, and in many cases its duty-free access already exists almost entirely.”
Perdue said he had spoken to the president about the importance of maintaining the NAFTA agreement for the country’s agricultural sector.
“He’s concerned about American agriculture, but he’s also concerned about the overall economy,” Perdue told reporters.
“The president understands very clearly that NAFTA has been beneficial to agriculture,” he continued. “The challenge is, he’s looking at the trade deficit that’s occurred after NAFTA was done, primarily in autos and auto parts. How do you reconcile those two?”
Powers is taking a similar position as Perdue’s to protect Washington’s ag industry.
“We’re doing everything we can to talk to people and educate them as to the benefits of NAFTA for our sector and for agriculture in general,” he said.
Powers added that he is “fairly optimistic” about the second stage of discussions as it relates to agriculture, as the negotiators will likely find agreement on less expansive provisions first.
Powers said he anticipates the third round, hosted in Ottawa, Canada in late September, to be the more strategic and sensitive round. Trade remedies fall into the more delicate category of topics to cover, which negotiators will likely tackle during this phase of talks, he added.
A fourth round is slated to take place in Washington, D.C. in October, and will be followed by three additional rounds which could stretch into early 2018.