USDA officials call for Canada to present NAFTA proposals as Trump sidesteps NAFTA

January 08, 2018

Canada must step up its engagement in the renegotiation of the North American Free Trade Agreement, Agriculture Secretary Sonny Perdue and Under Secretary for Trade Ted McKinney said in remarks at the annual American Farm Bureau Federation conference — while President Trump hardly mentioned the pact in his speech.

 

Trump, addressing farmers in Nashville on Monday, held back on criticizing NAFTA, as he has repeatedly done in the past, noting only that the administration was working to ensure a fair and reciprocal new deal.

 

“To level the playing field for our great American exporters, our farmers and ranchers as well as our manufactures, we're reviewing all of our trade agreements to make sure that they are fair and reciprocal,” Trump said. “On NAFTA, I am working very hard to get a better deal for our country and for our farmers and manufacturers. It's under negotiation as we speak.”

 

He said that Mexico and Canada are “making all of that money, it's not the easiest negotiation, but we're going to make it fair for you people again.”

 

He made no other overt mention of trade in his address, which lasted about 20 minutes.

 

Trump did recognize Sen. Pat Roberts (R-KS), chairman of the Senate Agriculture Committee, for making the trip to Tennessee. Asked last week if Trump was likely to address trade during his remarks, Roberts told Inside U.S. Trade that "he better."

 

On the other hand, Trump's chief agriculture advocate, in remarks earlier on Monday, said it was time for Canada to come to the negotiating table and constructively engage.

 

“To get a deal, we need all sides to seriously roll up their sleeves and get to work,” Perdue said. “We, the United States, have put a number of proposals on the table to modernize NAFTA, and critically for agriculture to address key sectors that were left out of that original agreements — specifically dairy and poultry tariffs in Canada. Now we need to ask our partners to the north, our negotiating partners, to step up, engage in meaningful conversation so we can get the deal done for them and for you.”

 

U.S. Trade Representative Robert Lighthizer at the conclusion of the fifth round of NAFTA talks in November 2017 called on both Canada and Mexico to more constructively engage by putting forward counterproposals to already tabled U.S. positions.

 

Perdue suggested the farmers tell Canadian Agriculture Minister Lawrence MacAulay, who also addressed the conference, to urge his negotiators to step up.

 

MacAulay told the conference that it was important for the Farm Bureau to continue to advocate on behalf of the agriculture sector.

 

“I also understand how important it is that [Farm Bureau President] Zippy [Duvall] and all of us and our politicians work together to make sure that we remain strong in the agricultural sector,” he said. “Your voice needs to be heard more than ever.”

 

McKinney, in his remarks on Jan. 7, said he and Perdue have consistently advocated for NAFTA using whispers and a megaphone, when necessary.

 

“I like to say we have used whispers when whispers are the best form of communicating and we've used a megaphone with the volume on high,” he said.

 

But McKinney added that time was running out for the NAFTA talks. He cited the upcoming Mexican election as a complication, saying “I think it's time, particularly with this next round getting to the very last before Mexico gets into its elections, to raise your issues.

 

“The U.S. has put its offers on the table. It's time to sit down and negotiate and I hope those negotiations are a way to keep these three wonderful countries bound together as we have very successfully found for the last 25 years and not blow it up,” he said.

 

The next round of talks begins on Jan. 23 in Montreal.

 

McKinney honed in on the Canadian Class 7 dairy pricing strategy — which has drawn the ire of the U.S. industry — as an issue that must be addressed in the negotiations. Dairy, he said, is “an itch that needs to be scratched.”

 

“It's time to land this ship and come to the table,” he added on dairy.

 

MacAulay, however, defended the Canadian industry's supply management system, comparing Canadian policies that protect dairy to U.S. policies that protect the American sugar market.

 

“Looking at the world and looking at what other countries do in other commodities, there are always small priorities — small issues in every countries, like sugar in the U.S. — agriculture is a country issue,” he said. “Everybody wants to make sure that they take care of their agriculture sector and that's what we intend to do too.”

 

The Canadian government is fully supportive of the supply management system, MacAulay said, adding that it has been successful for Canadian consumers and farmers.

 

Perdue, MacAulay and McKinney all offered optimistic outlooks for the NAFTA talks, saying the believed the talks would be successfully modernized.

 

“A successful completion and improvement of the NAFTA negotiations remain a top priority,” Perdue said. McKinney called the renegotiation “the most important project we have now.”

 

“Any barriers to a huge volume of trade and investment between us, any attempt to disrupt or dismantle the cross-border supply chain across our continent would hurt our economies and our livelihoods as citizens,” he said.

 

Perdue, in an interview on Fox Business News on Monday morning, addressed the possibility of a NAFTA withdrawal — which Trump has repeatedly threatened — by saying that having the ability to walk away from a deal is essential to a negotiating strategy.

 

“He's a tough negotiator and he believes you have to be willing obviously to walk away from a deal if people are not dealing fairly,” he said. “And that's where we are, that's where he is.”

 

In his remarks at the Farm Bureau conference, Perdue reiterated his belief that the NAFTA talks will be successful.

 

“All that said, I have great faith in President Trump’s skills as a negotiator and I am confident that he will strike the best deal possible for the United States and that we will have a fair NAFTA agreement that works well for our economy, including the agriculture sector,” he said.

 

Farm Bureau President Zippy Duvall, in his remarks on Jan. 7, said he expected Trump to make good on a promise he made last year that “what comes out of the NAFTA negotiations would be even better than what we have today.”

 

Perdue and Lighthizer also lauded the release of a report from the Task Force on Agriculture and Rural Prosperitythat Trump established last year. The interagency task force was chaired by Perdue and included USTR.

The report called the expansion of export markets key to boosting rural development.

 

“Trade is essential to agriculture and rural prosperity, so if we are to open up new economic opportunities for rural communities, we must increase export market access, tear down foreign trade barriers, and enforce our trade laws to make sure other countries play by the rules,” Lighthizer said in a Jan. 8 statement. “USTR is committed to this administration-wide effort to break down barriers for rural America, grow our economy and ensure the United States remains the world’s leader in agriculture trade.” — Brett Fortnam (bfortnam@iwpnews.com)

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