Today's update examines recent news articles that address issues associated with NAFTA and U.S. corn exports to Mexico. As the future direction of executive branch trade policy continues to evolve, this uncertainty is potentially weighing on agricultural markets.
Yesterday, the Senate Finance Committee held a hearing to consider the nomination of Robert Lighthizer to be United States Trade Representative. With respect to agricultural trade issues, China, the North American Free Trade Agreement (NAFTA), and Japan were all topics that were touched on.
Recall that last month, at a press conference before the Senate Ag Committee's first Farm Bill hearing in Kansas, Committee Chairman Pat Roberts pointed out that, "And trade — trade is on the minds of every farmer, every rancher. And I can assure you that trade is on the minds of my Senate staff and myself."
Recent news items suggest that anxiety in the agricultural community over Trump administration trade policy is not going away. After promising to renegotiate the North American Free Trade Agreement (NAFTA), floating the the idea of a 20% border tax adjustment or a tariff on Mexican imports, and pulling out of the Trans-PacifcPartnership (TPP), farmers are on edge about disruptions in export markets. In the past couple of days, from California specialty crops, to the U.S. livestock sector, to row crop growers in Nebraska and Illinois, agricultural reporters have scrutinized the potential impact of obstacles in agricultural trade flows. Other articles have shown that the future outcomes of trade policy remain uncertain.
Reuters writers Tom Polansek and Mark Weinraub reported on Tuesday that, "U.S. food producers and shippers are trying to speed up exports to Mexico and line up alternative markets as concerns rise that this lucrative business could be at risk if clashes over trade and immigration between the Trump administration and Mexico City escalate."
Donnelle Eller reported on the front page of Tuesday's Des Moines Register that, "President Donald Trump's decision to jettison the Trans-Pacific Partnership deal and renegotiate U.S. trade with Canada and Mexico could lead to a trade war that could put Iowa in the cross-hairs, worried state leaders told the Register on Monday."
Financial Times writers Demetri Sevastopulo, Shawn Donnan and Courtney Weaver reported yesterday that, "President Donald Trump signalled he will put trade protectionism at the heart of his economic policy, withdrawing the US from a historic Pacific trade pact and threatening to punish American companies for moving production overseas on his first working day in office."
Bloomberg writer Shannon Pettypiece reported late last week that, "President-elect Donald Trump won’t wait for Congress to confirm trade officials to act on his promises to withdraw from the Trans-Pacific Partnership trade deal and give notice he will renegotiate NAFTA, press secretary Sean Spicer said."
Frank E. Lockwood reported on the front page of the Arkansas Democrat Gazette on January 2nd that, "A congressman from northeast Arkansas will reintroduce legislation to ease trade restrictions with Cuba, and says he's hopeful that barriers to agricultural sales will be addressed early in 2017."
Shawn Donnan and Sam Fleming reported last week at The Financial Times Online that, "Robert Lighthizer, the lawyer [President-elect Donald Trump] picked for US trade representative, has for years likened free-trade advocates to political naifs. He will join Peter Navarro, another outspoken China hawk set to lead a new National Trade Council, and Wilbur Ross, the billionaire investor and the president-elect’s pick for commerce secretary, in a triumvirate chosen to deliver on Mr Trump’s campaign promise of an 'America First' trade policy."