Ag Policy Blog

Ag Groups to White House: Reconsider TPP and Wrap up NAFTA Talks

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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A Montana farmer signs a Farmers for Free Trade sign at the American Farm Bureau Federation annual meeting last month. (photo by Chris Clayton)

Agricultural groups started the White House's infrastructure and budget week on Monday by focusing on -- trade.

Farm groups coming together to call themselves the Asia-Pacific Working Group, which is parts of the U.S. Food and Agriculture Dialogue for Trade, sent a letter to U.S. Trade Representative Robert Lighthizer as the Asia-Pacific Working Group jumped on comments from President Donald Trump that he was interested in working on bilateral trade agreements involving the countries within the Trans-Pacific Partnership. The president had said the U.S. would negotiate with these countries either individually "or perhaps as a group if it is in the interests of all."

The eleven current TPP countries are marching on without the U.S. and preparing to sign their new deal next month in Chile and the new TPP would begin three months afterward. The U.S. Food and Agriculture Dialogue for Trade explained in its the letter to Lighthizer that newly-constituted TPP would be a bad deal for U.S. agriculture.

"Once this happens, our sector will be placed at a substantial disadvantage, as other countries gain entry into these markets at substantially lower tariffs and under preferential terms," the letter said. "Given the downturn in U.S. farm prices and profitability that already is hurting rural America, the timing could not be worse. American food and agricultural producers and companies are facing significant barriers in these markets that could be addressed within the improved rules and higher standards through reengagement with the TPP countries."

Given that there are "compelling reasons to ensure American farmers, ranchers, agribusinesses, retailers, workers and consumers benefit" from trade opportunities that exist in the region," the letter explains that the agricultural groups have several ideas of ways to reengage with TPP countries.

While some agricultural groups were encouraging the Trump Administration to engage on TPP, the American Feed Industry Association wrote an op-ed imploring the White House to "stop jousting with two of our most valuable trade partners" and get the renegotiation completed for the North American Free Trade Agreement. The American Feed Industry Association depends on the ability to export to Mexico and Canada, explained Lee Hall, chairman of the AFIA board of directors and a vice president at hallway Feeds.

Yet, as Politico reported, Mexico's corn producers are now suggesting that, as part of a NAFTA deal, Mexico should slap a 45% tariff on U.S. yellow corn exports to Mexico.

Mexico is projected to have produced 26.8 million metric tons of corn (just over 1 billion bushels) for the 2017-18 market year on 7.23 million hectares, (17.86 million acres). Mexico will import another 15.6 mmt, (614 million bushels). In 2016, the U.S. exported $2 billion of corn to Mexico.

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2/13/2018 | 3:06 PM CST
TPP countries have said they will wait for the next president as they wont make any changes