Ag Policy Blog

NAFTA Talks Stalling Out

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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It's May 31, do you know what's happening with NAFTA?

Bloomberg reported Chrystia Freeland, Canada's foreign minister, was in Washington, D.C., the last few days to negotiate further on the North American Free Trade Agreement. But talks have gotten pretty quiet as the countries approach another deadline set by the Trump administration. The Toronto Star reported Freeland cut her trip to D.C. short and returned home.

June 1 was the date set for Canada and Mexico's tariff exemptions for steel and aluminum to run out. Those were supposed to be linked to NAFTA talks but it doesn't appear talks ramped up at all this week.

Canadian Prime Minister Justin Trudeau told Bloomberg earlier in the week, "No NAFTA is better than a bad deal, and we've made that very clear to the president." Trudeau added, "We're not going to move ahead just for the sake of moving ahead."

Trudeau had talked with President Donald Trump last week after the White House announced it was invoking a national security clause to investigate auto imports. Trudeau followed up with conversations this week with Vice President Mike Pence.

The Toronto Star reported Wednesday the Canadian government is planning on trade retaliation against the U.S. over both the steel and aluminum situation, which have become intertwined with the NAFTA talks. The Canadians find it "frankly absurd" that the U.S. would label steel or aluminum from Canada, a close ally, as a national security risk. The U.S. also has a trade surplus in those metals with Canada.

The Star stated, "Freeland said the Liberal government “is absolutely prepared to and will defend Canadian industries and Canadian jobs” saying only she would respond 'appropriately.'" https://goo.gl/…

A few reports this week show some contrasts from a pair of southern states. The Dallas Morning News cited "unease" in Texas as negotiations drag on. Sen. Jon Cornyn, who is the No. 2 Republican in the Senate, said in the article, “There’s some unease with regard to the administration’s philosophy and policy on trade. NAFTA is a good thing. ... Why would we want to ruin this great economic recovery we’ve seen by creating more uncertainty and havoc?”

The Dallas article also had a great visual on trade flow between the three countries, which adds up to more than $1 trillion every year. The U.S. accounts for $458 billion in annual trade flow in NAFTA will receiving $526 billion from Canada and Mexico combined. That generates a $68 billion trade deficit for the U.S. https://goo.gl/…

While Texans are nervous about changes to NAFTA, the Orlando, Fla., Sentinel reports Florida agriculture commissioner candidates see NAFTA hurting its farmers. Current state Ag Commissioner Adam Putnam has been a critic of the deal. He's leaving the office, but most of the candidates to replace Putnam are largely critical of NAFTA as well. Florida state rep. Matt Caldwell, a Republican, said in the article that NAFTA has "choked American jobs, and manufacturing and agriculture have suffocated the most." He added that unless changes are made to NAFA "we can expect Florida-grown goods to disappear from supermarket shelves."

Another GOP candidate, former state Rep. Baxter Troutman, said he supports withdrawal from NAFTA, but in a slower manner than a quick cancelation of the deal. http://www.orlandosentinel.com/…

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

Follow him on Twitter @ChrisClaytonDTN

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