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U.S.T.R. Hoping for NAFTA Renegotiation This Month

Politico’s Morning Trade reported on Monday that, “After four straight days of ministerial-level talks in Washington last week, [U.S. Trade Representative Robert Lighthizer] and his two counterparts, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Secretary Ildefonso Guajardo, are taking a break from NAFTA meetings and will reconvene on May 7. In the meantime, talks are shifting to a technical level, with negotiators meeting on a near-constant basis in the hope of overcoming key sticking points and reaching a deal as soon as possible.”

Monday’s update explained, “Freeland, speaking to reporters outside the Winder Building on Friday, said ministers would be returning home to ‘consult on the significant progress‘ that was made during last week’s meetings. Officials ‘will be working intensively,’ she added.”

On Tuesday, Wall Street Journal writer William Mauldin reported,

President Donald Trump’s top trade official wants to finish a renegotiation of the North American Free Trade Agreement by the middle of the month to get a revised pact to a vote in Congress by the end of this year.

“U.S. Trade Representative Robert Lighthizer told a gathering at the U.S. Chamber of Commerce on Tuesday that he hoped to strike a deal with his Canadian and Mexican counterparts within a week or two after high-level talks resume next week.

“He said a delay beyond that time frame risked ‘having a problem’ in getting the new Nafta to a vote in Congress this year, he said.”

Mr. Mauldin added, “The Trump administration is eager to get a revised Nafta to the House and Senate before January. A large number of House Republicans are set to retire at the end of the year. If the Democrats win control of the House in what is expected to be a tough election year for the GOP, they could block efforts to enact Nafta or other parts of Mr. Trump’s agenda.

“‘The new Congress will have its own priorities, and if they’re substantially different, they’re not going to be happy with whatever we do, in my opinion, because it was negotiated with a lot of input from the previous Congress,’ Mr. Lighthizer said.

“To get a new Nafta to a vote, the Trump administration is following the rules of 2015 trade legislation known as fast track, or trade promotion authority, which allows for expedited congressional consideration of trade agreements struck by the executive branch. But under the fast track process, a deal reached after mid-May has a lower chance of reaching Congress this year, according to congressional aides following the talks.”

Reuters writers David Lawder and Dave Graham pointed out Tuesday that, “If a [NAFTA] deal takes too long, [Ambassador Lighthizer] said approval by the current Republican-controlled Congress may be on ‘thin ice‘ without sufficient time for a vote before November elections put a new Congress in control in January 2019.”

“U.S. Democrats, who have traditionally been skeptical of free trade deals, are expected to gain ground in November elections, possibly taking control of the House of Representatives,” the Reuters article said.

Also Tuesday, Bloomberg writer Andrew Mayeda reported that, “Lighthizer is scheduled to meet with his Mexican and Canadian counterparts on Monday after he returns from a trip to China. The three have been holding regular talks since August, and last week gathered in Washington for several days of negotiations. While Canada’s government highlighted a series of major sticking points that still remain in a call with stakeholders Tuesday, Lighthizer struck an upbeat tone.”

The article stated, “Meanwhile, Canada looks to be warning a deal isn’t imminent. The country’s deputy chief Nafta negotiator, Martin Moen, privately briefed stakeholders Tuesday and cited divides on a series of core issues, such as U.S. demands for a sunset clause, government procurement and agriculture, according to a summary published online by the Canadian Association of Railway Suppliers. ‘There does not appear to be a noticeable progress for a quick resolution of the outstanding issues,’ the summary said. The rail group didn’t immediately respond to requests for comment.

“A spokesman for Canadian Foreign Minister Chrystia Freeland declined to comment on a stakeholder account of the call and referred to the minister’s remarks earlier in the day, when she said good progress had been made in talks, particularly on the crucial issue of the auto sector.”

The Bloomberg article added, “Speaking earlier on Tuesday, Commerce Secretary Wilbur Ross cautioned there’s a risk Nafta negotiations could drag on for months.”

Meanwhile, a news release last week from House Ag Committee Member Ann Kuster (D., N.H.) stated, “[On April 24th, Rep. Kuster] joined a bipartisan call on U.S. Trade Representative Robert Lighthizer to ensure protections for domestic dairy farmers during negotiations of the North American Free Trade Agreement. The letter specifically raises concerns about a Canadian program that unfairly props up Canadian dairy producers at the expense of American farmers. In New Hampshire, the dairy industry provides more than 3,500 jobs and has an impact of $141 million on the state and local economies.”

“Canada protectionist policies surrounding dairy restrict American exports across the border and create a domestic oversupply issue in the United States,” the release said.

And, a news release from USDA on Tuesday stated, “‘As World Trade Month begins, we recognize the vital role trade plays in supporting U.S. agriculture, rural America, and our economy,’ said U.S. Secretary of Agriculture Sonny Perdue.”

Agricultural trade is critical for the U.S. farm sector and the American economy. In 2017, U.S. exports of food and farm products totaled $138.4 billion, up from $134.7 billion in 2016. Additionally, farm exports supported more than 1.1 million American jobs across the entire economy. With 95 percent of the world’s consumers living outside the United States, USDA’s work pursuing new and expanded trade is essential to removing barriers, helping America’s farmers and ranchers reach new customers, and ensuring that U.S. products and producers are treated fairly.

Graph from USDA (May 1, 2018).

“‘Since the day he took office as USDA’s first Under Secretary for Trade and Foreign Agricultural Affairs, Ted McKinney has been circling the globe promoting U.S. agricultural products and engaging with foreign government counterparts to break down barriers to U.S. exports,’ added Perdue. ‘I said he’d be our ‘million-mile flyer’ and he’s already getting close to hitting that mark. In just over 6 months on the job, he’s covered 10 countries, from Europe to Asia to the Middle East to Latin America, advancing our policy interests and promoting our products.'”

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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