U.S. President Donald J. Trump says that the renegotiations of the North American Free Trade Agreement (NAFTA) are progressing with Mexico, saying that the two countries have reached a “trade understanding.”
However, the president of the United States says a revised trade agreement with Mexico will not carry the NAFTA name.
Posting on Twitter on August 27, Trump offered the vague Tweet: “A big deal looking good with Mexico,” but offered no further explanation.
According to a CBS News report released later that morning, Trump said an “understanding” had been reached between the U.S. and Mexico, but the third country that was involved in NAFTA, Canada, was not mentioned as part of that understanding.
However, Trump said that “"we're starting negotiations with Canada pretty much immediately.”
Wheatever type of agreement is reached, Trump said it will not bear the name of the previous agreement between the three North American nations.
“We'll get rid of the name NAFTA. It has a bad connotation because the United States was treated very very badly for NAFTA,” he said.
Reaction from Farmers for Free Trade
Farmers for Free Trade (FFT), which has been a major watchdog during the NAFTA renegotiations, was one of the first organizations to issue a statement concerning the development.
“While any news of progress on restoring NAFTA certainty is reassuring for American farmers, there are questions that remain on the nature of a final deal. Farmers will ultimately be judging any new NAFTA deal by two crucial measures: will it provide any new market access for American ag exports and will it do anything that erodes the enormous gains the original NAFTA provided? On those points, it will be necessary for Canada to rejoin the negotiations and for an agreement to be reached among all parties before a judgement can be made. American farmers know better than most that a deal isn’t done until the ink is dry and all parties have agreed,” stated Brian Kuehl, executive director of FFT.
“For our farmers, whose livelihoods depend on global markets, the end goal remains restoring NAFTA certainty, de-escalating a trade war that’s put them in the crosshairs, and returning to negotiating new trade agreements that open foreign markets hungry for made-in America farm exports. While we are encouraged the Administration is seeking out NAFTA stability, there is still significant work that remains in delivering on the trade priorities for farmers, ranchers, and rural communities.”
Feed and grain associations respond
The National Grain and Feed Association (NGFA) and North American Export Grain Association (NAEGA) released the following joint statement after the announcement of the preliminary trade agreement:
"The announcement of a preliminary trade agreement between the United States and Mexico represents a significant, positive step in modernizing and further enhancing North American food and agricultural commerce that benefits the economic growth and consumers in the hemisphere. We hope this agreement contributes to broader discussions on ways to further integrate food and agricultural markets between the United States, Mexico, and Canada to provide for increased investment, food security and consumer preference.
"We are particularly pleased by what we understand to be a number of efforts to preserve and enhance current trade terms in North America. These include: the retention of zero tariffs on agricultural products traded between the United States and Mexico; the addition of 21st century language to enhance information exchange and cooperation on agricultural biotechnology trade-related matters; an agreement to strengthen disciplines for science-based sanitary and phytosanitary (SPS) measures to facilitate trade; and an agreement that grading standards and services on agricultural products, including grains and oilseeds, will operate independently from domestic registration systems for grain and oilseed varieties. We are hopeful that these benefits will be realized in a final agreement that includes Canada.
"Addressing non-tariff trade barriers, as the preliminary agreement reportedly does, is particularly important to facilitating the grain and oilseed trade. We will be reviewing closely the reported inclusion in the preliminary agreement of SPS provisions that would: 1) increase transparency in the development and implementation of SPS measures; 2) advance science-based decision making; 3) improve processes for certification, regionalization and equivalency determinations; 4) conduct systems-based audits; 5) improve transparency for import checks; and 6) enhance the compatibility of SPS measures between the two countries. The new agreement reportedly also would establish a new mechanism for technical consultations to resolve SPS issues between the two countries, which also would be a welcome development.
"Despite these clear improvements, we are disappointed by reports that the preliminary agreement removes or weakens key dispute-resolution procedures that currently benefit investors under the North American Free Trade Agreement (NAFTA). These include provisions embodied in Chapters 19 and 20 of the NAFTA. These protections have been utilized successfully by U.S. agriculture to protect long-term investments in Mexico and defend against unjustified legal actions. These protections provide confidence to investors throughout the supply chain and protect industry efforts to create jobs and develop markets throughout North America.
"The announcement of a preliminary agreement is an important step toward eliminating tariff and non-tariff barriers in North America. In the coming days we urge U.S. and Mexican negotiators to work with Canada and build on the progress already made by this preliminary agreement. We hope these efforts will tackle existing trade-distortive food and agricultural policies so that an integrated North American marketplace can flourish under a modernized and more open trading system that is a template for future trade agreements.
"NGFA and NAEGA look forward to providing further analysis and input once the full details of the preliminary agreement are released."
