NAFTA graphic of Canada, Mexico and US flags on puzzle pieces Marc Bruxelle/iStock/Thinkstock

NAFTA still has a long way to go

Latest round of negotiations brought no major breakthrough, and timeline potentially lengthened as stalemate continues.

Over the weekend, negotiators from the U.S., Canada and Mexico said progress remains slow on the ongoing North American Free Trade Agreement (NAFTA) negotiations, leaving farmers to continue to deal with the uncertainty created with the threat of withdrawal and uneasy neighbor relationships.

U.S. Trade Representative Robert Lighthizer said “some progress was made” during the sixth negotiating round, held in Montreal, Que. One chapter on corruption was closed, and progress was made on a few others. “We finally began to discuss some of the core issues,” he said in a press conference. “So, this round was a step forward, but we are progressing very slowly.”

Mexico's Economy Secretary Ildefonso Guajardo said chapters on food safety measures, digital trade and telecommunications were about 90% completed. The controversial proposal on produce seasonality wasn’t tackled and has been opposed by Canada and Mexico.

Floyd Gaibler, U.S. Grains Council director of trade policy and biotechnology, noted that great progress was made on the sanitary and phytosanitary chapter, which deals with trying to provide science-based mechanisms to resolve non-tariff barriers when they do arise. He said negotiators are close to actually getting that chapter completed and likely will by the next round. Language on biotechnology builds off foundational language reached when the U.S. was party to the Trans-Pacific Partnership (TPP) negotiations, and Gaibler said reports are that “very good progress” also is being made in that area.

He said much of the agriculture industry’s disagreements pertain to Canada’s dairy supply management program and similar protection for its poultry and egg industries. Some wheat trading issues also were left unresolved with Canada. In the subset of 28-29 major chapters under negotiation, those controversial proposals still have a long way to go before any specific outcome is achieved.

“Traditionally what happens with these controversial areas is they are not ripe for completion or final agreement until you get to an end of the negotiations. The fact they remain unresolved is frustrating but not totally unacceptable,” Gaibler said.

Dan Kowlaski, vice president of CoBank’s Knowledge Exchange Division, said NAFTA still has a long way to go before a final deal is met. With Mexico’s presidential election in July, there is a firm deadline for NAFTA talks to be wrapped up by March, but that could be pushed out a little bit further, Kowlaski said.

Gaibler said in this round, those involved started hearing the first hints that the discussions could extend beyond March -- maybe into April or May -- from sources in Mexico – the ones with the most immediate time constraints due to the July elections.

“This is somewhat positive they started mentioning longer time frames,” Gaibler explained. “It is an indication they would really like to complete these negotiations this year and not have to spill over and finalize next year.”

The delayed timeline is concerning for farmers. Brian Kuehl, executive director of Farmers for Free Trade -- a bipartisan campaign to restore support for agricultural trade -- said the threat of withdrawal from NAFTA has created uncertainty for farmers.

“As we head into planting season, farmers need the confidence that exports to America’s two most important agricultural export markets will remain viable,” said Kuehl, who was also on hand in Montreal. “While it’s heartening to know that progress was made and compromises were proposed in Montreal, it’s also clear that these negotiations could last longer than anticipated.”

He added that the new potential for NAFTA withdrawal to remain an option into 2019 is a major concern. “It’s time to remove the cloud of withdrawal so that farmers and ranchers have the certainty they deserve while NAFTA is being modernized,“ Kuehl added.

Kowlaski said there is no more important issue to agriculture than trade, especially with the uncertainty that looms for U.S. producers. "We see it as our number-one risk for 2018 for our ag customers, given we don't know the direction trade will go," he said. "We're already back on our heels because of TPP and giving up to our competitors. If NAFTA doesn't go forward as we hope, we need to find ways to become competitive with a stacked deck against us."

Lighthizer said he believes some real headway was made in Montreal, noting, “The United States views NAFTA as a very important agreement. We are committed to moving forward. I am hopeful progress will accelerate soon. We will work very hard between now and the beginning of the next round, and we hope for major breakthroughs during that period. We will engage with both Mexico and Canada urgently, and we will go where these negotiations take us.”

The seventh round of NAFTA negotiations is planned for Feb. 26-March 6 in Mexico City, Mexico.

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