The sixth round of negotiations on modernization of the North American Free Trade Agreement (NAFTA) is happening this week, and agricultural groups as well as their farmer members are making their voices heard.
With many considering March to be a crucial deadline, the current round could offer hope as to whether there is a will and a way for the U.S., Canada and Mexico to move forward with successful negotiations. Several agricultural groups and farmers were on the sidelines of the talks occurring in Montreal, Que., with the hope of sharing the positive benefits NAFTA has had for the agriculture industry and reiterating the need to reach a successful conclusion.
Farmers for Free Trade, a coalition working to educate about the importance of trade to agriculture, brought a group of farmers to Montreal to discuss how trade affects producers down to the farm level. In addition, Farmers for Free Trade held a media call and roundtable Friday featuring farmers, U.S. Grains Council director of trade policy Floyd Gaibler and former U.S. chief agricultural negotiator Darci Vetter, who now serves as a trade advisor to the coalition.
“The prevailing view is that this round is being portrayed as pivotal,” Gaibler said. “The hope is that we will begin to see flexibility on controversial provisions, with new ideas, counter-proposals and other options coming to the surface and, hopefully, providing some positive direction on both the pace and substance of the negotiations.”
There were some indications that the countries could reach an agreement on sanitary and phytosanitary (SPS) issues. Gaibler said he believed transferring the starting point of the SPS chapter from the Trans-Pacific Partnership (TPP) talks over to the NAFTA negotiations was a positive. Vetter added that all three NAFTA countries support a science-based and risk assessment process for animal and plant health disease issues, and the SPS provisions would expedite the resolution of any issues across North American borders.
Farmers pay the cost
Farmers for Free Trade executive director Brian Kuehl said the real loser of the 2016 election was trade, because those on the left and the right both accepted protectionist views and spoke out against trade.
Vetter, who was at the negotiating table for the U.S. during the TPP talks, said farmers now have to take on additional risk and uncertainty because the U.S. withdrew from TPP and has left the NAFTA negotiations unresolved. She added that the longer the NAFTA negotiations remain incomplete, it forces Canada and Mexico to look elsewhere for trade.
Vetter said if the negotiations are delayed, farmers will pay the cost, because it is likely that “our clients will react accordingly.” Those actions include seeking out other suppliers as well as advancing their own trade agendas with other countries, which would place the U.S. at a disadvantage.
Groups weigh in
Ahead of the meeting, organizations representing the North American wheat value chain sent a letter to U.S. President Donald Trump, Mexico's President Enrique Peña Nieto, Canada's Prime Minister Justin Trudeau and lead negotiators from each country to emphasize the importance of NAFTA to the wheat industry. Key groups from the wheat value chain, ranging from seed to bread and baked goods, signed the letter.
“The industry understands the need to modernize the 23-year-old agreement, but it must be done in a way that benefits the food and agriculture sectors in all three countries,” said National Association of Wheat Growers president Gordon Stoner, a wheat farmer from Outlook, Mont. “It’s critical that all parties remember during the negotiations that when one link breaks, the entire chain is weakened.”
Dairy groups continue to call for an overhaul of Canada’s dairy system, specifically its supply management and Class 7 pricing program, which has distorted market access for U.S. products.
In a letter to House Ways & Means trade subcommittee chairman David Reichert (R., Wash.) and ranking member Rep. Bill Pascrell (D., N.J.) – both of whom are attending the talks – National Milk Producers Federation (NMPF) president and chief executive officer Jim Mulhern and U.S. Dairy Export Council (USDEC) president and CEO Tom Vilsack urged lawmakers to also focus on preserving the current duty-free U.S. market access in Mexico granted by NAFTA and improving other key areas affecting agricultural trade, such as preventing the misuse of geographical indications.
NMPF and USDEC senior vice president Jaime Castaneda is also in Montreal this week to engage with trade officials from all three NAFTA nations regarding the same objectives.
The organizations have pushed for the complete removal of Canada’s Class 7 pricing program, “which, in 2017, led to a 200% surge in Canadian skim milk powder exports around the world and slashed U.S. exports of certain dairy products,” according to the letter.
“Our exporters and their supplying farmers rely on those global markets, and Canada is using Class 7 to artificially compete in them at our expense,” Vilsack said. “Our concerns about this harmful program are very much shared by the world’s other leading dairy exporters, as well. We have the unique opportunity to actually resolve this problem via the NAFTA 2.0 process, and it’s critical that we seize it.”
Reports indicate that Canadian dairy farmers may not have as much to give at the NAFTA negotiating table now that TPP has been finalized without the U.S. The Canadian Press reported that if the U.S. wants increased market access to Canada, it should rejoin TPP, which granted a 3.25% quota that, at the time, was expected to be filled mainly by the U.S. Now, that could be filled by Australia and New Zealand, leaving little additional wiggle room for Canadian dairy producers, according to Dairy Farmers of Ontario CEO Graham Lloyd.
Earlier in the week, a broad group of agricultural, business, industry and manufacturing groups intended to share the agricultural market successes ahead of the next round of talks during a social media outreach day using the hashtag #NAFTAWorks.