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Trump sets NAFTA goals
By JIM RUTLEDGE
D.C. Correspondent
 
 WASHINGTON, D.C. — Following up on a campaign promise, the Trump administration will begin renegotiating the North American Free Trade Agreement (NAFTA) as soon as mid-August, setting the stage to rewrite the terms on U.S. trade with Canada and Mexico that amounted to more than $1.1 trillion in goods last year.
 
President Donald Trump announced July 17 new guidelines to start the talks aiming to overhaul the pact first approved by Congress in 1994, that will also need Congressional approval on any new deal.

The guidelines call for strengthening the 23-year-old trade deal by cutting the U.S. trade deficit, preventing currency manipulation, eliminating non-tariff barriers for U.S. agricultural exports and increasing and toughening enforcement.

To begin the talks, the White House’s agenda was required to be sent to Congress by U.S. Trade Representative (USTR) Robert Lighthizer at least 30 days before the negotiations could start. The 17-page document serves as a blueprint to reduce the trade deficit with the two North American border countries, restrict the amount of imported material in goods that qualify under the agreement and eliminate a controversial and complicated process to review trade remedies.

As reported by the U.S. Census Bureau on foreign trade balances last year, trade with Canada produced $545 billion in goods with an $11 billion deficit, and trade with Mexico amounted to $525 billion with a $63 billion deficit.

Release of the guidelines has been met with mixed reaction by leading farm lobbying groups. The National Farmers Union (NFU) issued a statement that the provisions didn’t go far enough, while the American Farm Bureau Federation (AFBF) pushed for more modernization priorities to meet the needs of the 21st century, that the guidelines touched upon.

NAFTA was crafted by the Clinton administration 23 years ago as a free trade zone in North America to eliminate most tariffs and encourage the flow of goods across its borders. “The new NAFTA must continue to break down barriers to American exports,” a USTR press release stated. “This includes the elimination of unfair subsidies, market-disorienting practices by state-owned enterprises and burdensome restrictions of intellectual property.

“The new NAFTA will be modernized to reflect 21st century standards and will reflect a fairer deal, addressing America’s persistent trade imbalances in North America.”

The guidelines propose gutting NAFTA’S Chapter 19 dispute settlement tool, which in the past has caused contentious disputes between Canada and the United States, as reported in the Washington Post.

For the agricultural industry, the guidelines call for eliminating specifically barriers that affect farmers, proposed getting rid of the “non-tariff barriers to U.S. agricultural exports including discriminatory barriers; the restrictive administration of tariff rate quotas, and other unjustified measures that unfairly limit access to markets for U.S. goods, such as cross subsidization, price discrimination and price undercutting,” the document outlined.

For too long, U.S. farmers and their representatives have argued that Canada has been unfairly protecting its dairy market and end up hurting U.S. interests in the process. It’s noted that this provision in the NAFTA goals would abolish the protections that Canada has been able to maintain on the market.

It is expected this provision alone will be fought vigorously by Canada, but with a new agreement, it would for the first time open up the dairy market to U.S. competition.
 
Of the guidelines overall, NFU President Roger Johnson said he was “cautiously optimistic that several of the USTR’s recommendations for the NAFTA renegotiation will address the fundamental flaws of the free trade agreement. “However,” he added, “the objectives are a missed opportunity for family farmers and ranchers.

Free trade agreements such as NAFTA often favor corporate interests over those of working people. Unfortunately, this has led to corporate consolidation in agribusiness, threatening the economic stability of family farmers and ranchers.”

Johnson also criticized the guidelines for “the noticeable omission of country-of-origin-labeling (COOL) for meat products … The lack of accurate labeling undermines independent cattle producers who proudly produce high-quality, American-grown beef and deny consumers the opportunity to know where their food is produced.”

Zippy Duvall, AFBF president, said, “We look forward to expanding our market opportunities with our North American neighbors even further by bringing this agreement into the 21st century.

“Free trade agreements have a proven track record of boosting revenue for U.S. agriculture. They create a level playing field for our farmers and ranchers to compete in the global marketplace, and NAFTA is no exception with ag exports to Canada and Mexico.”

Duvall added the U.S. should modernize NAFTA by adding the following provisions: “Update science-based sanitary and phytosanitary rules; improve dispute settlement procedures for fresh fruits, vegetables and horticultural products; eliminate or reduce Canadian tariff barriers to dairy, poultry, eggs and wine and implement barriers to ultra-filtered milk; address the misuse of geographical indicators; and develop consistent, science-based approach to biotechnology.”

In response to the announcement, the Mexican economy ministry stated the blueprint “will help set out more clearly the subjects to be negotiated and the timing of the modernization process.”

Canada Foreign Minister Chrystia Freeland said the country welcomes the opportunity to improve the existing NAFTA framework, “while defending Canada’s national interest and standing for our values.”

From Capitol Hill, House Agriculture Committee Chair K. Michael Conaway (R-Texas) issued a statement saying, “As the administration looks to highlight American-made products … there is no better way to do so than by charting a path to economic advancement for America’s farmers, ranchers and foresters.”

Several Democrat lawmakers criticized the blueprint, including Sen. Ron Wyden of Oregon, the top Democrat on the Senate trade committee, calling the outline “hopelessly vague, both in explaining how the administration’s specific objectives will benefit the U.S. on key topics ranging from intellectual property and investment, to currency manipulation and government procurement.”

Talks are set to begin Aug. 16 and the administration says it hopes to finish by January 2018, ahead of the Mexican presidential campaign. 
7/26/2017