Until recently, the top negotiators for the U.S., Mexico and Canada were working “intensely” to finish up a deal for a new North American Free Trade Agreement, but activity has dwindled to a near standstill and pessimism has replaced those high hopes for a speedy conclusion.
Several thorny agricultural issues that industry and government officials feared earlier on would snarl the talks have not even been addressed in months while negotiators remain bogged down over a U.S. “rules of origin” proposal aimed at bolstering U.S. production of automobiles and car parts, according to sources involved in the talks.
“There’s just been no progress on the ag issues,” said one farm industry source, whose growing frustration was echoed by several others.
And a lack of progress - on everything from U.S. demands that Canada dismantle its dairy supply management system to a U.S. proposal to make it easier to sue Mexico for dumping fruits and vegetables – makes it less likely that the issues will even be included in a final deal.
“They’re still hammering on rules of origin and that’s going to have to get resolved if there’s any chance for the rest of it,” said another industry official, who asked not to be named in order to speak freely. “There’s been no progress on any of the ag stuff, so if they close the deal, all the pending ag issues will likely just fall by the wayside; they’ll be dropped.” That concern was repeated by three other ag industry representatives.
Still, not all parties are behind the U.S. “seasonality” proposal, which aims to make it easier for produce growers to sue Mexico for flooding the U.S. market with cheap fruits and vegetables. The proposal is widely opposed outside of Florida, Georgia and some other Southern states. Under current trade rules, farmers can only file anti-dumping suits if they can show damages across the entire country. The U.S. proposal would make an exception for perishable and seasonal crops, allowing complaints on a regional basis. It is being championed mostly by Florida tomato farmers who are struggling to compete with cheap imports from Mexico. Fruit and vegetable importers, packers and distributors are firmly opposed.
So is Mexico. Several sources said that the U.S. has offered to cap the number of crops that would be covered under the proposal to just two – tomatoes and peppers – but government officials have not confirmed that.
“For Mexico, it’s a red line, whether it’s two or 22 crops,” one U.S. source said. “It doesn’t matter.”
The rejection of the U.S. dairy proposal – vehemently opposed by Canada – would be disastrous for the U.S. dairy industry. Last year, when negotiations were just beginning, Jaime Castaneda, senior vice president of trade policy for the U.S. Dairy Export Council, told Agri-Pulse that the sector was counting on the U.S. to lift Canada’s barriers to U.S. exports.
Jaime Castaneda, U.S. Dairy Export Council
“We see NAFTA as an incredible opportunity for us to open this market,” Castaneda said at the time. “If this is not addressed … it will be a failure.”
Beyond eliminating Canada’s supply management system, the U.S. dairy industry is also invested in seeing a successful NAFTA agreement to help save cheese exports to Mexico, according to the 20 U.S. senators who fired off a letter to U.S. Trade Representative Robert Lighthizer on Tuesday.
The bipartisan roster of lawmakers, led by Sen. Tammy Baldwin, D-Wis., stressed that NAFTA is necessary to counteract a recently signed pact between Mexico and the European Union that likely seeks to protect European cheese names like Roquefort, Asiago and Gorgonzola.
If Mexico agrees to the list of so-called “geographical indication” (GI) names, it would not be able to import U.S. cheese labeled with those names.
“As you work to renegotiate the North American Free Trade Agreement, we urge you to engage with your Mexican and Canadian counterparts to ensure that future trade policies do not limit export opportunities for American dairy farmers and processors,” the senators said in the letter. “In light of Mexico’s proposed agreement with the EU, we are deeply concerned that American cheesemakers will be harmed by a reversal of their current access to the Mexican market and will be denied the opportunity to sell products to Mexican consumers using common cheese product names that have been marketed for decades.”
While there are no signs that the ag issues are being debated by the three North American countries, President Trump made it clear this past weekend that he wants to see progress on the rewrite of the trade pact.
Canadian Prime Minister Justin Trudeau issued a statement Monday, saying that he and Trump “discussed the progress being made in the North American Free Trade Agreement negotiations and the possibility of bringing the negotiations to a prompt conclusion.“
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