Tuesday, 23 October 2018

 

 
Canada agreed to join the trade deal that the United States and Mexico reached last month, preserving the three-country format of the original North American Free Trade Agreement (NAFTA), according to the US National Farmers Union (NFU). 

When speaking about USMCA at a conference held in the Rose Garden at the White House on Monday, President Trump said, "It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our farmers and manufacturers, reduce trade barriers to the U.S. and will bring all three great nations closer together in competition with the rest of the world." The President went on to say that this agreement was the "most important trade deal" in U.S. history, covering USD1.2 trillion in commerce among the three countries.

While Trump and the administration touted major gains in the new pact, most in the agriculture industry were rather mum about the gains. NFU President Roger Johnson noted that Farmers Union is pleased to finally see progress on the trade front, rather than the disputes and trade disruptions that have been occurring over the past year.

"The prospects of progress on trade with our two closest trading partners is encouraging," said Johnson. "While this agreement is certainly no cure-all, it is hopefully a start to repairing our trade relationships around the world, to restoring our reputation as a reliable trading partner."

At the same time, Johnson pointed out the missed opportunity for the administration to bring back country-of-origin labeling (COOL) for beef and pork, a law that 90 percent of Americans support, yet was repealed by Congress because of pressure from Canada and Mexico.

Johnson also highlighted ISDS, a provision that allows multinational companies to sue governments over their laws. Placing this sort of power in the hands of corporations has, in part, led to more consolidation and less money and power in the hands of family farmers and ranchers. The new agreement removes the old NAFTA ISDS text, yet maintains provisions specific to the oil and gas industries.

According to the US National Potato Council (NPC), the potato industry is one of the most successful specialty crops in terms of growth in exports. These gains have been the product of careful trade negotiations and enforcement actions over many decades and the commitment of time and resources by our industry in support of those efforts. In addition to the vital North American markets of Canada and Mexico, Asian markets, especially Japan, China, Korea and Taiwan, are top export destinations for fresh and processed potatoes. U.S. potatoes are a U.S. agriculture export success story.

The U.S., Canada and Mexico have been attempting to renegotiate NAFTA for over one year. Prior to the commencement of those negotiations, NPC sent Trump a letter outlining our priorities for enhancing NAFTA. Mexico is the third largest export market for U.S. potatoes. Most exports are processed potatoes, particularly fries. Frozen, dehy and fresh potatoes entered Mexico duty-free due to NAFTA. If the U.S. withdrew from NAFTA, U.S. frozen potato exports to Mexico (USD122m export value) and dehy (USD32m export value) would immediately face Mexico’s Most Favored Nation tariff of 20%. U.S. fresh potatoes to Mexico (USD37m in export value) would face either a 50% or 70% tariff. Canadian processed potatoes would likely continue to enter duty-free. Over USD150m in export sales could be lost to Canada if the U.S. had failed to either renegotiate a trilateral NAFTA agreement or complete a bilateral deal with Mexico. 

Related articles: 

US Farmers Join Group to Support NAFTA 

Frozen Potato Exports Up 8% in April 

Potatoes USA to Export Seeds in Warm Climates



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