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US farmers hope NAFTA survives the Trump era

Apr 28 2017 12:00

New York - President Donald Trump's threat to abandon the North American Free Trade Agreement has US farmers worried their access to prime Canadian and Mexican export markets could shrink.

The US neighbors are the second and third-largest importers of American agricultural goods, after China.

And US agricultural exports to those countries have risen far faster than to other destinations since NAFTA took effect 23 years ago - nearly quadrupling with Canada and quintupling with Mexico.

But Trump has ceaselessly hammered the regional treaty, calling it a "disaster" for the United States.

In tweet on Thursday he renewed his threat to "terminate NAFTA" if renegotiation efforts fail to achieve "a fair deal for all."

For the farming industry, this is a non-starter and lobbyists in Washington have taken up the charge.

"We do not want to go backwards with Canada or Mexico," said David Salmonsen, senior director for congressional relations at the American Farm Bureau.

"We do not want to see anybody imposing tariffs or any new non-tariff barrier."

US agricultural exports currently travel duty-free to Mexico and to Canada, with the notable exceptions of dairy and poultry goods, which are the subject of perennial disputes with the northern neighbor.

In 2016, the US exported more than $20.5bn in agricultural goods to Canada, or 15% of all American farm exports, with prepared foods first among them, followed by fruits and vegetables.

Preserve what's working

Before talks have even started, which can only happen after the White House notifies Congress, Trump raised the temperature this week by slapping import duties on Canadian softwood lumber, part of a 35-year-old trade dispute.

Relations between Washington and Ottawa were further strained when the US president promised to defend American dairy producers against the export barriers he says they face in selling their goods in Canada.

Chris Galen, spokesperson for the National Milk Producers Federation, said, "It's important that we fix what's not working - dairy trade with Canada - and preserve what is working - our relationship with Mexico."

He noted that US dairy exports to Mexico totaled $1.2bn "amounting to nearly one fourth of all US exports."

The group "has insisted and will continue to insist that any renegotiation of NAFTA preserves this vital trade relationship," he said in an email.

Mexico imported $17.9bn worth of US agricultural goods in 2016, or about 13% of US farm exports.

Relations between Mexico City and Washington have suffered in the Trump era due to the US president's hostile remarks on immigration and plans to build a border wall.

Corn growers are most concerned for the future of NAFTA. Mexico is their largest export market, where the grain is mostly used as cattle feed.

"We want to do everything we can to keep that market open to us," said Kurt Hora, president of the Iowa Corn Growers Association.

Yet Mexico already has reached out to suppliers in countries like Argentina or Brazil, hoping to add leverage when it arrives at the bargaining table.

The US farming industry is firmly opposed to exiting NAFTA but ideally would like to see the trade pact modernized in order to advance some of their own claims, such as even greater access to the Canadian market or harmonising certain standards.

The now-defunct Trans-Pacific Partnership, to which all the NAFTA members were party, addressed those and other issues. But Trump rose to power in no small part by campaigning against that agreement, helping seal its fate.

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donald trump  |  us  |  economy  |  trade  |  farming


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