WASHINGTON — The United States and Mexico announced what President Trump referred to as the United States-Mexico Trade Agreement on Aug. 27, a preliminary agreement that would be a revision to the North American Free Trade Agreement (NAFTA), which does not yet include Canada.
The agreement was announced by President Trump from the Oval Office, after he and outgoing Mexican President Enrique Peña Nieto discussed the details over the phone. The revisions reportedly address provisions for agriculture, labor unions and digital economic issues. The inclusion of Canada in the pact depends on the outcome of continued negotiations between its trade officials with the US, but in the meantime White House officials expect to approve the bilateral deal and pass it on to Congress by the end of the week for approval.
Secretary of Agriculture Sonny Perdue released a statement praising the preliminary deal and lauding President Trump for keeping his promise to “renegotiate the old, outdated North American Free Trade Agreement.
“The agreement specifically addresses agricultural biotechnology to keep up with 21st Century innovations,” Perdue said. “And we mutually pledge to work together with Mexico to reduce trade-distorting policies, increase transparency, and ensure non-discriminatory treatment in grading of agricultural products.
In June, Mexico implemented retaliatory tariffs on imports of most US pork products in response to US tariffs on aluminum and steel. On June 5, the tariff rate on chilled and frozen pork muscle cuts increased to 10 percent from zero. The tariff increased again to 20 percent on July 5.
“This is nothing short of a great victory for farmers and ranchers, because locking in our access to Mexican markets is critical to supporting farm income and strengthening rural communities,” Perdue said. “Mexico has historically been a great customer and partner, and we are happy to have this resolved for our agricultural producers.
Perdue said he is hopeful that the deal will soon include Canada.
“We now hope that Canada will see the need to settle all of the outstanding issues between our two nations as well and restore us to a true North American Free Trade Agreement,” he said.
In June, Canada announced higher tariffs on $16.6 billion worth of US products including $170 million worth of US beef, according to the National Cattlemen’s Beef Association (NCBA). That tariff went into force on July 1.
The US Dept. of Agriculture (USDA) also announced approval of a plan to introduce $12 billion in programs to assist farmers that have been negatively affected by the ongoing trade disputes with other countries.
In total, the government plans purchase $1.2 billion in products from farmers. The USDA will also provide almost $5 billion in payments to farmers as well.
The Market Facilitation Program will make payments to farmers and producers of hogs, soybeans, sorghum, corn, wheat, cotton and dairy starting on Sept. 4.
One of the most substantial purchases includes $558 million in pork for a federal nutrition assistance and child nutrition programs.
In response to the announcements, The National Pork Producers Council (NPPC) praised the effort to provide assistance to producers.
“True to his word that he would have our backs, President Trump today demonstrated his commitment to America’s farmers, including pork producers, by giving us some relief from the financial hit we’ve taken from retaliatory tariffs from some of our biggest trading partners,” said NPPC President Jim Heimerl, a pork producer from Johnstown, Ohio.
NPPC also urged the administration to finalize the trade agreement with Mexico.
Along with tariff disputes with Canada and Mexico, the United States is still in a struggle on trade with China. On July 6, the Chinese government imposed a 25 percent tariff on $34 billion of US exports to China — including beef, pork, soybeans, corn, cheese and numerous other agricultural products — in response to a similar duty imposed by the US on Chinese exports.
“While we’re grateful and commend the administration for its action to help us, what pork producers really want is to export more pork, and that means ending these trade disputes soon,” Heimerl said.
The National Turkey Federation (NTF) published a statement in support of the current and continued negotiations between Mexico and the US.
“NTF applauds the progress announced today on a trade deal with Mexico,” the organization said. “Stabilizing the trade relationship with the turkey industry’s largest export customer is of vital importance to our members. NTF is also encouraged by the reported agreement to strengthen disciplines for science-based SPS (sanitary and phytosanitary) measures, which has long been sought by the turkey industry."