U.S. NAFTA Renegotiation Objectives in Line with USA Rice Positions

ITP-U.S. NAFTA Renegotiation Objectives in Line with USA Rice Positions-170718
Why not?
Jul 18, 2017
WASHINGTON, DC – Since election day when it became clear the North American Free Trade Agreement (NAFTA) would be a target for at least renegotiation if not abandonment, USA Rice has steadfastly and aggressively defended the agreement as positive for rice.

Yesterday President Trump’s Office of the U.S. Trade Representative (USTR) issued its Summary of Objectives for the NAFTA Renegotiation and it is apparent the administration has heard loud and clear the agriculture community’s concerns about a wholesale renegotiation of the sweeping agreement.

“We are pleased to see that the first objective under the agriculture trade section is to ‘maintain existing reciprocal duty-free market access for agricultural goods,’” said Carl Brothers of Riceland Foods, Inc., and Chair of USA Rice’s International Trade Policy Committee.  “It’s satisfying to see that our message of ‘do no harm’ is front and center in USTR’s report.  NAFTA is the reason Mexico is the number one export market for U.S. rice and why we have seen steady growth in sales to Canada and any renegotiation of the deal must not harm these vital markets.”

The objectives also call for the inclusion of enforceable sanitary and phytosanitary (SPS) measures that build upon obligations of members of the World Trade Organization, something USA Rice welcomes.

U.S. rice shipments have at times suffered from sudden interruptions based on SPS concerns raised by Mexican border officials and U.S. negotiators will seek to “establish a mechanism to resolve expeditiously unwarranted barriers that block the export of U.S. food and agricultural products.”

“We need a mechanism to quickly deal with border disruptions, particularly for rough rice, and especially when there is little science to back up the stoppages,” said Brian King, of Erwin-Keith, and USA Rice Chairman.  “USA Rice is going to pay close attention to these negotiations and provide guidance to our negotiators to maintain and improve our strong export position.”

The 18-page summary fulfills the statutory obligation of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 that the President provide Congress with his objectives 30 days before negotiations commence.  USTR has said negotiations will begin on August 16. 

As is usual in the early stages of trade negotiations, the parties talk of a speedy conclusion with a goal of completing the talks prior to Mexico’s presidential election in July 2018.  The timeline will likely lag, especially if existing terms of the agreement, sensitive to any of the parties, are reopened.

Earlier this morning, the House Ways and Means Subcommittee on Trade had a hearing on the modernization of NAFTA.  In his opening remarks, Chairman Dave Reichert (R-WA) stated, “Despite its success, NAFTA was negotiated two decades ago when the landscape looked very different.  Today’s challenges require new rules, not only to reduce tariffs on our exports but to remove non-tariff barriers as well.  It is important that we get this right.  A modernized NAFTA agreement will serve as a template for future agreements with our trading partners.”

NAFTA entered into force on January 1, 1994, and has greatly liberalized trade between Canada, Mexico, and the United States.  There are exceptions, including sugar trade between Mexico and the United States, and Canada maintains strict controls from NAFTA partners on dairy and poultry imports.  U.S. rice exports to Canada and Mexico have risen steadily from just over 400,000 metric tons in 1994 to 1.1 million tons last year.  Mexico is by far the largest destination, accounting for 81 percent of last year’s exports.



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