Industry: NAFTA could be better

by Erica Shaffer
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 NAFTA
Stakeholders submit comments on NAFTA renegotiations.
 
WASHINGTON – The US agriculture industry has seen tremendous gains under the North American Free Trade Agreement, according to comments submitted by stakeholders in the industry. A modernized NAFTA must preserve those gains while implementing some improvements.

“US food and agriculture trade under NAFTA is one of trade’s biggest success stories. Since the agreement was enacted, US food and agricultural exports to Canada and Mexico have more than quadrupled — growing from $11 billion in 1993 to over $43 billion in 2016,” William Westman, senior vice president for International Affairs at the North American Meat Institute (NAMI), said in a statement. “NAFTA has played a central role in boosting incomes for millions of US farmers, ranchers, meat and poultry processors, allied manufacturers, and packaging and transportation companies — and continues to provide important and profitable markets for our nation’s rural agriculture-based communities.”

“We recognize that NAFTA is now over 23 years old and improvements to the agreement can be made,” he added.

One area of the free trade agreement in need of improvement relates to exports of US poultry. The US poultry industry has limited access to the Canadian market because Canada restricts certain imports of poultry to protect domestic supplies.

“Nonetheless, also as outlined above, US exports to Canada have been significant in some poultry products, and the US poultry industry sees the NAFTA modernization effort as a potential avenue for further improvement,” according to comments submitted by the National Turkey Federation, the National Chicken Council and USA Poultry & Egg Export Council. Negotiations for the Trans-Pacific Partnership may provide a way forward.

Under the TPP, Canada and the US had agreed to raise import quotas for US chicken into Canada. “The US poultry industry sees these increases as helpful and politically possible on both sides of the border,” industry groups said. “The US industry also believes that there should be similar increases in the market access for US turkey and turkey products.”

Second, TPP negotiations led to significant progress toward improving and updating the Sanitary and Phytosanitary (SPS) rules applicable to free trade agreements.

“This important work should not be lost. The poultry industry joins its fellow agricultural industries in urging the United States, Canada and Mexico to adopt these improved SPS provision as a replacement to the SPS chapter currently in the NAFTA text.”

NAMI’s ‘wish list’ of priorities included, among others, requests to:

  • Maintain existing zero tariff market access for US meat and poultry products in both Canada and Mexico (expand to include all products where inconsistencies exist).
  • Maintain (i.e., prevent the introduction of tariffs, tariff rate quotas, or safeguards) and expand upon current market access, tariff concessions and other provisions that have enabled economic integration and supported farm income.
  • Align standards, including product and ingredient registration, and certification requirements.  Prevent the misuse of geographical indications to erect de facto non-tariff barriers to common agricultural products.
  • Avoid new or additional mandatory country of origin labeling requirements. Mandatory Country of Origin labeling for beef and pork products from Canada and Mexico was fully adjudicated at the World Trade Organization (WTO) through the Dispute Settlement process and addressed by the US Congress.

 

While NAMI wants to keep country of origin labeling out of a modernized NAFTA, R-CALF called for reinstating mandatory COOL. The group argued that “transnational packers” have brought supplies of cheaper cattle and beef into the US market — lowering prices for domestic cattle as a result — because they don’t have to disclose to consumers the origin of imported beef.

Additional recommendations from R-CALF include:

  • changing the rules of origin so beef from imported cattle cannot bear a USA label;
  • including special rules to protect the perishable nature of cattle;
  • designating cattle and beef as like/kind products so beef supply surges that depress cattle prices can be addressed;
  • reinstating tariffs to offset the price differentials between the three countries;
  • reversing weakened US food safety standards; and
  • restoring import restrictions to better protect the health of the US cattle herd.

 

“We now have the opportunity under President Trump’s leadership to modernize NAFTA so that it properly addresses the cattle industry’s unique structural and biological characteristics,” R-CALF said.  “Doing so will restore opportunities for current and new US cattlemen and will help to rebuild the nation’s weakened rural economy.”

The Trump administration sought public comments on specific topics such as digital trade, intellectual property rights, regulatory practices, state-owned enterprises, services, customs procedures, sanitary and phytosanitary measures, labor, environment and small and medium-sized enterprises. The deadline for public comments on the renegotiation of NAFTA was June 12.

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