August 1, 2017

NAFTA Update

U.S. Agriculture Secretary Sonny Perdue was in Mexico last week, meeting with his counterpart, José Calzada. Secretary Perdue said the U.S. agricultural sector has “benefitted tremendously under the rules of NAFTA,” and he hopes the upcoming negotiations do not diminish the beneficial impact.  Secretary Perdue’s says the U.S. goal should be “first of all, to do no harm in agriculture.”

Floyd Gaibler, director of trade policy and biotechnology for the U.S. Grains Council, expressed similar concerns, stating the Council hopes agriculture does not end up as a retaliation target in the negotiations.  Gaibler stated there are indications Mexico is seriously looking for alternative suppliers of corn and other grain products, including Argentina and Brazil. 

Similarly, Kevin Brosch of the USA Poultry and Egg Export Council stated that “NAFTA has been a godsend for U.S. poultry” in testimony before the House Agriculture Committee.  Kendal Frazier of the National Cattlemen’s beef Association testified that “it is difficult to improve upon duty-free, unlimited access to Canada and Mexico.”

However, not all U.S. agricultural producers have fared well under NAFTA.  According to Reggie Brown of the Florida Tomato Growers Exchange and Florida Fruit and Vegetable Association, the U.S. specialty crop industry (such as berries, tomatoes and watermelons) are hurting under NAFTA.  He cited Mexico’s subsidization of its domestic fresh tomato industry and its dumping of fresh produce into the U.S. market at very low prices. 

U.S. farm exports are expected to reach $18.5 billion this year, up from $4 billion when NAFTA began.  Overall, Mexico and Canada represent nearly one-third of the total U.S. agricultural exports.

Questions? Please contact Mona Burton (801.799.5822 / mburton@hollandhart.com).
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