What’s next regarding NAFTA?

American agriculture will have a hard time succeeding without a solid trading relationship with other countries. Now that the Trans-Pacific Partnership is off the table, new President Donald Trump and his administration are now turning their attention to the North American Free Trade Agreement (NAFTA). It’s the first time an administration took a serious look at renegotiating at least parts of the deal since it was signed during the Clinton administration.

NAFTA, Free trade agreement with Canada and Mexico

The Trump Administration still has a goal of renegotiating the North American Free Trade Agreement (NAFTA) with Canada and Mexico in an attempt to make it more favorable for America. (photo from CNN Money)

The National Association of State Departments of Agriculture recently held their winter policy conference in Washington, D.C., and trade was one of the biggest topics of conversation. Nathan Bowen is the Director of Public Policy at NASDA. He says that NAFTA has been a very good thing for agriculture for a long time.

“U.S. agriculture depends on export opportunities for our livelihood,” Bowen said. “With the new administration, there’s a lot of talk about what’s going to happen on the international trade front.”

Bowen says NAFTA has been very important for U.S. farmers and ranchers, who depend on the markets in Canada and Mexico for significant parts of their livelihood. NASDA wants to make sure as the administration looks at redoing NAFTA, agriculture has a place at the table.

“We are working to make sure that agriculture keeps the gains they’ve made under NAFTA,” Bowen said, “and that we do take opportunities that are there to strengthen the agreement. Farmers send a whole range of commodities to markets in both Canada and Mexico.”

He says NAFTA has been good for a whole list of Ag sectors, including beef. U.S. beef exports to Mexico and Canada have almost tripled since the beginning of the agreement. It was a little over $600 million dollars back in 1994, rising to $1.9 billion as recently as 2015.

“The access that U.S. beef has enjoyed in both of those markets has really been important for the industry,” Bowen adds. “The same could be said for corn, with significant gains in that sector, and pork is another really good success story.”

Bowen adds that there really isn’t a timeline for negotiations between the three countries to begin but he’s hopeful it will start as soon as possible so that agriculture will know where it stands with market access to Canada and Mexico.

Here’s the complete conversation with Bowen:

Ag has trade questions for the new administration

Let’s go ahead and talk trade headlines from the latest edition of the National Association of Farm Broadcasting News Service headlines:

Trump Election Leaves Agriculture Awaiting Clarification on Issues

rabobank-logo-squircle-jpgA new report from Rabobank says the election of Republican Donald Trump as President of the United States has the food and agriculture sector awaiting clarification on his policies and positions. The Rabobank Food and Agribusiness Research and Advisory group authored the report on the possible implications of the election. Rabobank analysts say Republican-controlled Executive and Legislative branches could “mean swift action when the new administration takes office.” Rabobank notes the advisory group is watching trade, labor and farm bill talks for potential policy changes that could have longer-term implications on the industry. The report says while President-elect Trump’s policies are yet to be clearly defined, his statements during the campaign suggest drastic changes from current policy could be on the horizon. Finally, the report predicts agriculture markets may be impacted by foreign exchange volatility in the short term as Trump takes office in January.

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New Zealand Wants to Talk Trade with Trump

Trade

New Zealand Prime Minister John Key wants to talk trade with President-elect Donald Trump as he prepares to take office in 2017.

New Zealand’s Prime Minister John Key wants to talk trade issues with U.S. President-elect Donald Trump. In a phone call between the two this week, Key told Trump he wished to talk further about trade and the Trans-Pacific Partnership. Key told Radio New Zealand that TPP was “worthy of a much fuller discussion,” adding that Trump needs the chance to get a proper assessment before seeing how “we can move things forward.” The Prime Minister said Trump was not rejecting the notion. New Zealand indicated the nation would give the new U.S. administration time to fully consider its trade agenda. That comes after New Zealand’s Parliament approved legislation last week allowing the nation to join TPP, despite the likelihood the trade deal will not proceed.

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Canada Cattle Producers urge Trade Fight if Trump Revives COOL

country-of-originCattle producers from Canada will urge the nation to retaliate against the United States, should U.S. President-Elect Donald Trump revive the U.S. Country-of-Origin meat labeling program (COOL). An internal memo within Trump’s transition team detailed how the new administration would immediately initiate changes to the North American Free Trade Agreement with Canada and Mexico, according to Reuters. That could include measures on COOL, which would reignite a six-year trade battle between the U.S. and Canada. U.S. lawmakers repealed COOL last December after the World Trade Organization approved more than $10 billion in trade retaliations by Canada. Canadian Cattlemen’s Association spokesperson John Masswohl says: “We’re watching, and if we think it discriminates against our cattle, our recommendation is going to be that tariffs go into place immediately.” However, he added that until it’s clear how Trump might approach COOL, no action is necessary.

One of the bigger post-election questions is the North American Free Trade Agreement. President-elect Trump feels it needs to be renegotiated with Canada and Mexico. Cuba is another country that agriculture groups want to open up to free trade opportunities. A group of US farmers and congressmen went to Cuba to lobby for agricultural trade about a year ago:

Farmers Union conversation: Part 2

Agriculture has officially said goodbye to 2015.

As we continue to look ahead, Doug Peterson, the President of the Minnesota Farmers Union, said it’s important to look back at some of the lessons learned from 2015. One of the key policy items Farmers Union fought for was Country of Origin Labeling (COOL). Thanks to a lawsuit brought by Canada and Mexico, COOL has been repealed in by Congress.

“I don’t think it’s a dead issue necessarily,” said Peterson. “We believe people have a right to know where their food comes from, no different than where their shoes or shirts come from. Now, thanks to Congress’s wisdom, we have no ability to ask that question about where our food comes from.”

Farmers Union believes it boils down to safety.

Farmers Union

Country of Origin Labeling, pictured here, was recently repealed by Congress after the US was successfully sued by Canada and Mexico in world court. (photo from foodsafetynews.com)

“When it comes to China and other countries that may not have the same safety standards, be it with workers, food additives, or even testing, not have COOL is something we shouldn’t be allowing.

“If it’s coming from places like India and China, given the track record of some of these countries that had poison in dog and cat food, called melamine, a protein additive that also sickened children, you start to think maybe not having labels isn’t such a good idea,” Peterson said.

Peterson said the verdict against the USA and its Country of Origin Labeling was questionable.

“We lost Country of Origin Labeling, and we couldn’t even keep it voluntary because of the retribution of the world court,” Peterson said. “There are 36 other countries that currently have a Country of Origin standard in place. Canada has a very strong one, and they’re the people that brought the lawsuit against us, along with Mexico.”

He added, “You have to wonder if some of these international companies lobbying our Congress against Labeling Laws aren’t in these other countries too? Plus, if you don’t want labels on foods, what are you trying to hide? I guess that’s my question.”

Waters of the US and the Environmental Protection Agency are going to be another big concern in 2016.

Farmes Union and WOTUS

The Minnesota Farmers Union has opposed the EPA’s Waters of the US Rule, calling it government overreach, and a burden on farmers and non-farmers alike. (photo from farmfutures.com)

“I’ve always said the EPA is run by bureaucrats,” Peterson said. “The other thing no one seems to get a handle on is the Corps of Engineers holds final say on a bunch of permitting processes, and that’s just a morass of red tape. Whether you’re doing something good or trying to make improvements, they don’t have the ability within the EPA or the Corps to make good judgments.”

He said the Farmers Union saw that firsthand on their last Fly-In to Washington.

“I asked EPA counsel a question about the Corps permits, and what I got back was ‘well, the Corps doesn’t have a lot of speed and they’re not expediting some things as fast as they should,’ and that’s kind of bothersome. You end up blaming everybody else.”

Will WOTUS ever be officially adopted?

“I don’t think so,” Peterson said. “They’re going to be challenges. Minnesota Farmers Union opposed WOTUS right out of the block because we have our own wetlands conservation act. That’s even more stringent than the EPA.

“When I met with Gina McCarthy, EPA Administrator, there seemed to be a lack of clarity even as they were trying to define what they wanted to do. Roughly 36 of the current farming practices are exempted, so you can do things like tiling, ditching, and drainage.

“The issue is when you start looking at adjacent wetlands and how they work ecologically in a system,” Peterson said, “and that’s what they couldn’t answer for people. That’s a problem for the EPA, and the bureaucratic mumbo-jumbo is just going to get worse.”

He added, “That’s a terrible prediction for 2016. Another one is not much is going to get done because it’s an election year. It’s going to be a waiting game to see who controls Congress and who takes the White House.

“Think about it,” said Peterson. “What did Congress really get done? “They passed a continuing resolution and went home.

On the state level, Farmers Union will have its eye on property taxes.

Farmers Union and property taxes

The Minnesota Farmers Union will go before the Minnesota Legislature to lobby for property tax relief for farmers in rural areas, who they say carry to much of the burden of school district funding. (photo from agweb.com)

“People are going to ask for property tax relief,” Peterson said, “ because the burden falls on family farmers in rural school districts. That has to be addressed at some point with a new formula. They’ve worked at it, but we still don’t have a tax bill.

“Then, we move into another election cycle,” Peterson said, “so get your earmuffs out and try to figure out who’s going to promise the most and see where the mud sticks.”

 

Editors note:  I thought you might enjoy this explanation of WOTUS, and how the EPA was recently accused of breaking the law in an attempt to “promote” their idea.