Trade lawyer questions NAFTA negotiating tactics

The North American Free Trade Agreement negotiations are continuing, with several contentious issues to work through. A Veteran international trade lawyer is questioning Washington’s NAFTA negotiating tactics and wants to warn American agriculture groups to keep a sharp eye on how things develop and progress.

NAFTA Negotiating tactics

Daniel Ujczo is an International Trade Lawyer with Dickinson Wright law firm in Columbus, Ohio. He’s concerned about America’s NAFTA negotiating tactics and wants agriculture to keep the pressure on for a positive outcome. (contributed photo)

Dan Ujczo is an International Trade and Customs Attorney for Dickinson Wright Law Firm in Columbus, Ohio. He specializes in Canada-United States trade matters, so he’s keeping an especially close eye on the NAFTA negotiations. There are seven rounds in the discussions, and he noted that the most aggressive positions on trade began to show up during Round 3. He’s worried about the tenor and tone of the Trump Administration during these negotiations.

“We saw the U.S. begin to put forth very aggressive proposals in Round 3 up in Ottawa,” Ujczo said. “The first one was on government procurement, also known as “Buy American,” which basically said the U.S. is going to cut back on the number of government contracts Canada and Mexico are allowed to procure. At the same time, the U.S. wants Canada and Mexico to allow more American participation in bidding on their government contracts.”

He said that’s when feathers first began ruffling. Round 4 saw some aggressive proposals on automotive rules-of-origin, which the U.S. wants to bump from 62 percent North American content to 85 percent. The Trump Administration wants 50 percent of that 85 percent number to come from North America. Ujczo said there are no free-trade agreements in the world that have a nation-specific rule-of-origin like that.

The Canadian supply-management program restricts the amounts of American dairy, poultry, and eggs that get into Canada. Ujczo said Canada’s called it a “red line” that they won’t cross. It’s something to keep an eye on as the U.S. negotiators have already come out against the supply-management system.

“The U.S. is also talking about a sunset provision, meaning NAFTA would automatically terminate after five years unless Congress reauthorizes it,” he said. “Those are things that will cause Canada and Mexico to carefully consider their next moves. There is a very real possibility that the U.S. knows that Canada and Mexico can’t negotiate on issues like that, which means we’re left with one conclusion.”

Ujczo said that conclusion is, in his mind, the U.S. NAFTA negotiating tactics may be designed to try and get Canada and Mexico to walk away from NAFTA. If they don’t, he said the Trump Administration very well could walk away by the end of this year. He feels the Trump Administration doesn’t necessarily want to walk away from the deal, rather, they’re more concerned about “making America great again.”

Here is the complete discussion. Is he right? Is he just being politically motivated? I didn’t get the sense he was. It felt more like a warning to American agriculture to keep making your voices heard.

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:

Grains Council Encourages Focus On Expanding Ag Exports

Grain exports are a bright spot in the current farm economy and can grow even further through outreach to the 95 percent of the world’s consumers who live outside U.S. borders, leaders of the U.S. Grains Council said at the at the National Association of Farm Broadcasting (NAFB) convention this week in Kansas City.

US Grains Council Trade Exports

The US Grains Council says American farmers are producing another record grain crop and with 95 percent of the world’s population outside the US, it’ll take trade opportunities to move that product.

As newly-elected national leaders prepare to take office, Chairman Chip Councell, a farmer from Maryland, and President and CEO Tom Sleight told reporters that strong trade policies and robust overseas market development are critical to helping farmers seize these opportunities for growth and greater profitability.

The United States is on track to produce a record amount of corn this year according to U.S. Department of Agriculture (USDA) data out this week, with record exports also expected for feed grains in all forms, a measure that includes corn, sorghum and barley as well as products made with these grains like beef, pork, poultry and ethanol.

U.S. corn exports in September of this year increased 89 percent, to 6.3 million metric tons (248 million bushels), from year ago levels, with shipments to Japan, South Korea, Peru and Taiwan more than doubling. (See more analysis here.)

“Ag exports count for our farmer and agribusiness members and are counted on by customers who rely on the United States for a reliable supply of high-quality commodities and food products. Sales overseas are a bright spot in an otherwise tough ag economy and are something we can all work toward together,” Sleight said.

Though it now seems highly unlikely to get a vote in Congress, the Council also voiced support for the pending Trans-Pacific Partnership (TPP) as an opportunity to reduce tariffs, address vexing non-tariff challenges to U.S. market share and build a platform for future multilateral trade pacts.

“Regardless of the future of TPP, after this election cycle that has made so many here and abroad question the United States’ commitment to open trade, we urge our leadership to champion trade policies and the farm policy programs that help us develop the markets they offer,” he said.

“Doing so will not just help ensure farmer profitability but also help to restore faith in ag trade’s contribution to global food security and our country’s national security.”

The Council is an export market development organization for U.S. corn, sorghum, barley and related products including ethanol and distiller’s dried grains with solubles (DDGS), operating programs in more than 50 countries with the support of farmer and agribusiness members as well as funds from the Market Access Program (MAP) and the Foreign Market Development (FMD) program in the 2014 Farm Bill.