Reports indicate that a deal on the North American Free Trade Agreement (NAFTA) could be imminent, but dairy and other agricultural components remain outstanding. Negotiators from the U.S., Canada and Mexico continued to hammer out details of the nearly 20 outstanding chapters this week in hopes of finalizing a deal ahead of Mexico’s presidential elections this summer.

The Trump Administration has threatened to impose sanctions on steel and aluminum from Canada and Mexico starting May 1 if not enough progress has been made on NAFTA.

“I think we are reasonably close. Certainly, this has been a very good week,” Mexico’s Foreign Minister Luis Videgaray said of the talks.

U.S. Trade Representative Ambassador Robert Lighthizer has a trip planned to China next week. When asked whether a NAFTA deal could be reached before he leaves, Mexico's Economy Minister Ildefonso Guajardo said it would require creativity from all parties to achieve a deal by then. “We are trying to do our best, but there are still a lot of things pending,” he was quoted by Reuters as saying.

Pressure on dairy

A bipartisan coalition of members of Congress, representing states on both coasts and in the Midwest, sent a letter to Lighthizer this week urging him to demand an end to Canada’s trade-distorting Class 7 dairy pricing program, as well as its dairy tariffs, which have created an unfair playing field and essentially eliminated U.S. exports of certain dairy products.

In the letter, Reps. Lloyd Smucker (R., Pa.), Ron Kind (R., Wis.), Chris Collins (R., N.Y.), Suzan DelBene (D., Wash.) and 64 additional representatives expressed their concerns about Canada’s unfair trade practices on behalf of America’s 40,000 dairy farmers and the nearly 3 million workers whose jobs are tied to dairy product manufacturing. Canada has imposed stiff tariffs of 200-300% on U.S. dairy exports for many years.

“It is critical that the U.S. pursue an aggressive strategy to stop Canada’s ongoing and intentional disregard of its trade commitments, to the harm of U.S. dairy farmers and exporters. Otherwise, Canada’s new policies will chip away not only at the current trade with Canada but also at our trade surpluses to other markets that import milk powder as well,” said Tom Vilsack, president and chief executive officer of the U.S. Dairy Export Council.

The National Milk Producers Federation also called for Canada to eliminate all dairy tariffs to encourage free trade across North America for all commodities. Jim Mulhern, president and CEO of the federation, said, “Our dairy farmers are facing dire economic conditions this year, and the Canadian pricing scheme and tariffs are curtailing much-needed markets for U.S. dairy products. NAFTA should not be concluded without securing provisions that curb Class 7 and any other trade-distorting pricing scheme to ensure that U.S. dairy products can compete fairly in Canada as well as in other markets.”