USGC, NCGA weigh in on plan to renegotiate NAFTA

By Erin Voegele | May 18, 2017

The Trump Administration has announced plans to renegotiate the North American Free Trade Agreement. In response, U.S. Grains Council and National Corn Growers Association are speaking out to remind the administration how important NAFTA is to the U.S. agricultural industry.

NAFTA is an agreement between the U.S. Canada and Mexico that was established in 1994 and signed by former President George H.W. Bush. The agreement essentially aimed to reduce barriers to trade and investment among the three North American countries.

On May 18, U.S. Trade Representative Robert Lighthizer notified Congress that President Trump plans to renegotiate NAFTA. A statement issued by Lighthizer’s office indicates the negotiations aim to support higher-paying jobs in the U.S. and to grow the U.S. economy by improving U.S. opportunities to trade with Canada and Mexico. Negotiations are set to begin no earlier than Aug. 16.

President Trump announced his intention to renegotiate NAFTA in February. A statement issued by the U.S. Trade Representative notes that since that time, the USTR has begun consultations with committees of jurisdiction in Congress and advisory committees, as outlined by Trade Priorities and Accountability Act of 2015.

 “Today, President Trump fulfilled one of his key promises to the American people. For years, politicians have called for the renegotiation of this agreement, but President Trump is the first to follow through with that promise,” Lighthizer said. “USTR will now continue consultations with Congress and American stakeholders to create an agreement that advances the interests of America’s workers, farmers, ranchers, and businesses.” 

The USTR said it will publish a notice in the Federal Register requesting public input on the direction, focus and content of NAFTA negotiations.

 “NAFTA is the most critical free trade agreement on the books for U.S. grain farmers, providing open access to countries that are among our top corn, sorghum and barley export markets as well as significant and growing markets for distillers dried grains with solubles (DDGS) and meat products made using grain,” said Chip Councell, chairman of the USGC. “This agreement has served our industry extremely well over the past 20 years, allowing us and our customers there to integrate operations and build deep relationships that both sides value.”

“Our top priority in the modernization of NAFTA is to maintain this market access and keep in place what we and our customers have built,” Councell continued. “For instance, all corn products currently go into Mexico and Canada duty-free, with sales last marketing year of $2.7 billion in commodity corn alone. That demand is an essential part of ensuring farmers can continue to farm in this economy.”

“We look forward to working with the Trump Administration, Congress and our partners in Canada and Mexico as this process progresses to ensure our neighbors remain our top customers,” Councell said.

The NCGA has also weighed in on the announcement, urging Lighthizer to remember the interests of U.S. agriculture as the administration begins modernizing the agreement. “The Trump Administration understands that NAFTA has been an unequivocal success story for American agriculture,” said Wesley Spurlock,” president of the NCGA.

“Exports are one pillar of a strong farm economy, accounting for 31 percent of farmer income. Nowhere is the importance of trade stronger than right here in North America,” Spurlock added. “Since NAFTA was implemented, U.S. agricultural exports to Canada and Mexico have tripled and quintupled, respectively. We export billions of dollars of corn and corn products to these countries each year.”

“The National Corn Growers Association will work closely with the Trump Administration and Congress to build on the successful trade relationship we have with Canada and Mexico,” Spurlock said. “We want to ensure any updates to NAFTA maintain or increase opportunities for America's farmers and ranchers.”

According to data published by the USGC, the U.S. exported more than 1.9 million tons of DDGS and 28.57 million gallons of ethanol to Mexico during the 2015-’16 marketing year. Exports the previous marketing year reached 1.59 million tons of DDGS and 33.48 million gallons of ethanol.

During the 2015-’16 marketing year, the U.S. also exported 547,828 tons of DDGS to Canada, along with 2.13 million gallons of ethanol. During the 2014-’15 marketing year, U.S. exports of DDGS to Canada reached 548,366 tons, with ethanol exports reaching 2.39 million gallons.