NAFTA modernization effort kicked off

In May, U.S. Trade Representative Robert Lighthizer formally notified Congress of the Trump Administration’s plans to modernize the North American Free Trade Agreement (NAFTA) with Canada and Mexico.

The White House officially notified the Senate Finance and House Ways and Means committees, which have jurisdiction over trade, that the administration will update the 23-year-old North American Free Trade Agreement (NAFTA). The notification begins a 90-day period in which Trump trade officials must consult with Congress on the objectives of the trade talks. At least 30 days prior to negotiations starting, the administration must make public a “detailed and comprehensive summary of the specific objectives” for a new agreement.

NAFTA has been generally considered a very successful trade agreement for U.S. agriculture. Since NAFTA went into effect Jan. 1, 1994, U.S. trade north and south of the borders has more than tripled, growing more rapidly than U.S. trade with the rest of the world. Canada and Mexico are the two largest destinations for U.S. goods and services, accounting for more than one-third of total U.S. exports, adding $80 billion to the U.S. economy and supporting more than 3 million American jobs, according to data from the Office of the U.S. Trade Representative. In fact, U.S. manufacturing exports to Canada and Mexico have increased nearly 260% over the past 23 years, and U.S. farm exports to the countries have grown by more than 150%.

Agricultural organizations are hoping the modernization efforts preserve all of the positive benefits of the agreement.

“The Trump Administration understands that NAFTA has been an unequivocal success story for American agriculture,” said Wesley Spurlock, National Corn Growers Association president. “Exports are one pillar of a strong farm economy, accounting for 31% of farmer income. Nowhere is the importance of trade stronger than right here in North America. Since NAFTA was implemented, U.S. agricultural exports to Canada and Mexico have tripled and quintupled, respectively. We export billions of dollars of corn and corn products to these countries each year.”

The announcement means trilateral negotiations could begin as early as Aug. 16. The National Pork Producers Council urged the president to make sure that tariffs remain at zero for pork traded in North America.

 “Canada and Mexico are top pork export markets. We absolutely must not have any disruptions in exports to our No. 2 (Mexico) and No. 4 (Canada) markets,” said Ken Maschhoff, NPPC president.

The renegotiation provides the Trump Administration with a unique opportunity to reset the U.S. trade agenda, according to National Farmers Union (NFU).

“For far too long, our nation has stuck to a free trade agenda that has led to a massive $500 billion annual trade deficit, lost jobs, and lowered wages in rural communities across the U.S.,” said Roger Johnson, NFU president. “With this renegotiation of NAFTA, the Trump Administration has the opportunity to reset that agenda by instituting a new, fair trade framework that works for family farmers, ranchers, and rural residents. NFU urges them to do so in a fashion that does not upset the positive trade relations the U.S. agriculture community relies upon.”

 

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