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NAFTA Renegotiation Puts Agriculture Groups on Edge

May 23, 2017

As the Trump administration takes the initial steps toward renegotiating one of the country's most influential and controversial trade deals, groups that represent farmers and ranchers are already waving a caution sign.

President Trump has made it clear: he wants changes to NAFTA -- the North American Free Trade Agreement. The wheels of renegotiation are in motion after U.S. Trade Representative Robert Lighthizer sent a letter to Congressional leaders indicating that intention. The president is required to give Congress 90 days notice before opening up trade talks.

Some of the country’s largest lobbying groups that represent farmers and ranchers are warily watching from the sidelines, and preparing for what could be years of bilateral and trilateral trade negotiations.  

The talks are high stakes for certain sections of the agriculture industry. While it’s difficult to pin a dollar figure on how NAFTA has directly affected farmers and ranchers in the U.S., it has opened up markets for certain products. The U.S. exported nearly $39 billion worth of agricultural goods to Canada and Mexico in the 2016 fiscal year.

Since the deal went into effect in 1994, corn and pork have flowed more easily into Mexico, along with soybeans, wheat and other grains. Under NAFTA, exports of American agricultural goods to Canada increased 44 percent, according to the Office of U.S. Trade Representative, though Canada still has tight regulations on certain American products like milk, poultry and eggs.

U.S. shoppers have seen more variety too at the grocery store because of the deal. Mexican-grown avocados make up the majority of what you find in the produce section. In fact, you’ll find Mexico’s greatest representation on U.S. shelves in fresh fruits and vegetables. The value of Mexican fruit and vegetable imports totaled more than $10 billion in 2016.

NAFTA’s impact on trade was a signature piece of Trump’s campaign in 2016, where he frequently criticized the deal as “terrible,” and a “job killer.” In April, Trump signaled an intention to pull out of the deal, but retreated from that position after leaders from Mexico and Canada asked for a renegotiation. Trump still hasn’t ruled out a full American withdrawal.

With significant markets in play, and billions of dollars at stake, U.S. farm groups are on edge at the thought of tinkering with the deal. Trade associations for corn, wheat and soybean growers all say the deal that’s been in effect since the mid-’90s, is a net positive for American farmers. They would rather it be left alone.

“NAFTA is the critical piece of trade policy underpinning past success and future development of market potential yet to be tapped in Mexico,” U.S. Grains Council president Thomas Sleight said in a statement.

The nation’s largest organization for hog farmers echoed those sentiments.

“Canada and Mexico are top pork export markets. We absolutely must not have any disruptions in exports to our [Mexican] and [Canadian] markets,” National Pork Producers Council president Ken Maschhoff said in a statement.

Still, other farm interest groups, some of which retain some skepticism about NAFTA’s impact on American agriculture, see the renegotiation as an opportunity. The National Farmers Union, the country’s second largest general farm group, says the renewed trade talks could revive country of origin labels on meat, which Canada and Mexico have fought.

Farm groups are still reeling from the demise of the Trans Pacific Partnership, a trade deal negotiated under the Obama administration that became a fixture of the 2016 presidential campaign and was quickly scuttled when Trump took office.