The administration announced Monday [August 27] that it had reached a preliminary agreement in principle – subject to “finalization and implementation” – with Mexico regarding the ongoing renegotiation of the 24-year-old North American Free Trade Agreement (NAFTA).
The agreement is expected to benefit feed crop producers, feed users and the agricultural industry, said the office of the US trade representative (USTR). The updated trade agreement is anticipated to allow agricultural products to be traded more fairly.
The proposed arrangement maintains zero tariffs for feed, feed ingredients and agricultural products, the USTR reported. Both countries also agreed to reduce the use of “trade-distorting policies” including export subsidies or special agricultural safeguards.
The proposal addresses the use of new technologies like gene editing, and calls for increased transparency and consultation related to export restrictions for food safety purposes, the department said. It also addresses the use of science-based sanitary and phytosanitary measures.
Canada also is a member of NAFTA, but was not a part of the preliminary agreement.
Feed industry welcomes progress, looks to Canada
The US Grains Council said that it was pleased to hear about the progress being made with Mexico.
“We look forward to analyzing the provisions the United States and Mexico announced today and continued work toward the goal of an improved trilateral agreement,” said Tom Sleight, USGC president and CEO. Mexico is an important trading partner for all of the commodities that the council represents, he added.
“We are grateful for news today that the United States and Mexico have reached an agreement that will keep NAFTA modernization efforts moving,” he said. “This agreement is a major step forward for our relationship with Mexico and is a result of hard work over the last year to closely examine our vital partnership.”
However, he added, Canada also continues to be an important market for US feed grain and ethanol producers. The US’s northern neighbor is the country’s second-largest ethanol market and a top ten corn market.
“We hope the agreement today opens the door for Canada's reengagement, and we continue to oppose withdrawal from the existing NAFTA under any circumstances except the adoption of a new, beneficial and trilateral pact,” he said.
The US feed industry has been benefiting from NAFTA for more than 20 years, said Gina Tumbarello, director of international policy and trade with the American Feed Industry Association (AFIA). “The North American Free Trade Agreement has not only supported thousands of jobs within the feed and associated industries, it has grown the animal food and feed ingredient export markets in Mexico and Canada to the United States’ largest and second largest, respectively, today,” she added.
The progress is encouraging, however, the association also hopes to see Canada take part, she said.
The American Soybean Association (ASA) added the announcement of progress renegotiating NAFTA with Mexico was “welcome” news.
John Heisdorffer, ASA president added that the organization hopes to see Canada soon have a similar announcement. “We hope a new NAFTA will build on the original agreement for US soy and livestock product exports,” he added.
“Finalizing NAFTA will set a precedent for additional free trade agreements that we need to replace part of the soybean market we are losing in China,” he said. “ASA will continue to encourage the administration to find ways to address our nation’s trade deficit by increasing exports, including in the agriculture sector.”