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Messing with NAFTA

Agribusiness Matters 4-28-17

There are some things you don’t joke about. For agriculture, one is the North American Free Trade Agreement.

Farm Groups are breathing a sigh of relief, now that President Trump has decided not to withdraw the U.S. from the 23 year old trade treaty with Mexico and Canada.

However, what is to come is not at all certain.

President Trump assured the leaders of Canada and Mexico that the U.S. will stay in NAFTA for now, after earlier threatening to withdraw from the 23-year old trade agreement.

The decision announced by the White House to renegotiate NAFTA, followed an uproar by farm groups and others over a possible withdrawal.

American Farm Bureau trade adviser, Dave Salmonsen says, “I think other industry sectors made the point strongly and capitol hill weighed in. You had senators and congressmen also privately and publicly making the point that this was not the time to do this.”

Salmonsen says he is in favor of modernizing NAFTA after a 90-day notification of Congress, but not withdrawal of the trade agreement.

NAFTA has effectively quadrupled U.S. ag exports to Canada and Mexico. U.S. corn growers last year, exported $2.5 billion dollars of corn to Mexico, the top foreign market for US corn. Canada is also a top market.

National Corn Growers Association members grew so alarmed Trump was considering ditching NAFTA, the group issued a statement to remind the President its members helped elect him, and warned withdrawal would be a disaster, costing markets that would never be recovered.

NCGA’s Lesly McNitt says the are pleased with his response.

“We are relieved that the president has decided to not withdraw the United States from NAFTA and that he intends to remain engaged in negotiations to modernize the agreement with Mexico and Canada.”

However, some say uncertainty surrounding trade has impacts. NCGA and AFBF say they will watch the NAFTA talks closely, in hopes of protecting gains producers desperately need amid continuing tough times in agriculture.

Mexico has begun negotiating corn from Argentina and Milk from New Zealand.

Some say the uncertainty cause by President Trump has caused problems with both countries even if the treaty is saved.