NAFTA Talks Begin

OMAHA (DTN) -- Three farm leaders from Canada, Mexico and the United States on Wednesday sent a joint letter to their respective trade negotiators as talks began to renegotiate the North American Free Trade Agreement. The leaders called on trade representatives to streamline regulations and tackle trade barriers without disrupting the current flow of agricultural products among the three countries.

Led by Zippy Duvall, president of the American Farm Bureau, the farm leaders held a signing ceremony and press conference in Washington, D.C., at the National Press Club to discuss the trade pact and reiterate, as they have for months, that the NAFTA talks should "do no harm" to the current agricultural trade flows across North America.

Farm Bureau, the Canadian Federation of Agriculture and the National Agricultural Council of Mexico signed a letter stressing that trade negotiators should work to improve NAFTA, but not dismantle the trade pact.

Duvall noted Canada and Mexico are the No. 1 and No. 3 destinations currently for U.S. ag exports -- with China holding the No. 2 spot. Further, Mexico and Canada are the top exporters of agricultural products to the U.S.

"NAFTA continues to be a success story for North American farmers and ranchers," Duvall said. "For all the criticisms of our trade deals, we in agriculture want our trade negotiators to know that trade deals and open markets are largely beneficial to American farmers and ranchers and to the communities we live in, do business and raise our families."

As U.S. Trade Representative Robert Lighthizer opened the talks on Wednesday, he highlighted that American farmers and ranchers have benefited from NAFTA, as have border communities. Still, Lighthizer declared NAFTA has led to trade deficits, lost manufacturing jobs and businesses that have left the country outside of the gains in agriculture. "But for countless Americans, this agreement has failed," Lighthizer said. He pointed to the $57 billion overall trade deficit the U.S. had with Mexico in 2016.

Lighthizer added he shares President Donald Trump's view, which is that NAFTA has been a disaster. The trade ambassador added he does not intend the talks to be "a mere tweak" of the trade deal.

"We feel that NAFTA has fundamentally failed many, many Americans and needs major improvement," Lighthizer said.

Responding to such comments, Duvall said Farm Bureau's stance remains "do no harm" to current agricultural trade. He added that American farmers "played a major role" in getting President Trump elected, "and I don't see him doing harm to this treaty that has been good for American agriculture."

Not involved in the Wednesday presser was the National Farmers Union, which issued its own statement calling on NAFTA negotiators to restore trade balance and domestic sovereignty that NFU members believe has been lost in trade deals. NAFTA rules have largely benefited corporate America, said Roger Johnson, president of NFU.

"The Trump Administration must use this 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 is transparent to the American public and does not upset the positive trade relations the U.S. agriculture community relies upon," Johnson said.

While agriculture, in general, has been a trade success story under NAFTA, each country has had its winners and losers under the pact. U.S. grains and oilseeds have seen exports steadily rise under the pact -- corn, soybeans and wheat accounted for $4.8 billion in sales just to Mexico last year. Still, fruit and vegetable growers, particularly in the Southeast U.S., have lost market share to increasing imports from Mexico. Meanwhile, U.S. dairy and poultry producers are frustrated by the quota limits, tariffs and lack of overall access to Canada, which has a domestic supply management system for dairy, eggs and other poultry products.

Still, Duvall said agriculture as a North American region needs to come together.

"We do have a problem in Florida," Duvall said. "We do have a problem in the Northeast. We do have problems in certain areas. Let's have some rules around this trade treaty about how we have swift decisions around solving those problems."

Busco de la Vega, president of National Agricultural Council of Mexico, said through a translator that trade creates winners and losers. While consumers in Mexico benefit from grain and meat imports, de la Vega noted, "The soya, corn, bean and rice and pork growers in Mexico have a serious problem with competitivity (competition)."

Ron Bonnett, president of the Canadian Federation of Agriculture, responded to a question about supply management by saying the CFA supports the current supply management system.

"I think our government has been very clear they are going to defend supply management, and we are on board with that," Bonnett said.

Bonnett had said the three presidents of agricultural groups laid out in their joint statement specific changes to NAFTA in which they could all agree. That common ground focused on "increased and improved regulatory alignment," such as harmonizing rules on pesticides. Another goal is to increase the flow of goods at the borders by reducing inspections of products entering a country that were already inspected once they left the export country.

"All of those types of things will streamline costs for producers and streamline costs with consumers of those products," Bonnett said. "That goes back to the theory of building on what has been working and trying to streamline a lot of the processes on regulations and technical barriers."

Bonnett was asked about the possibility of eliminating language on dispute resolution. He noted that removing such language essentially strips enforcement out of the trade pact.

The ag groups proposed further alignment of science standards for human health, plants and animals, and breaking down non-scientific barriers to trade. Further, they said the agreement needs to be adapted to technologies that were not yet created when NAFTA began.

De la Vega said his group has stressed to the government that agriculture is not to be exchanged for other parts of the economy in a trade deal. Together, the agricultural economies of NAFTA "can go out and conquer markets in South America, Asia and Europe," de la Vega said through a translator.

Responding to complaints that Mexican farmers take advantage of low wages and poor labor rules to export fruits and vegetables, de la Vega said labor rules should not be spelled out in NAFTA. "On the labor topics, we believe each country should be addressing its own things," he said.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/ES)

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