February 7, 2018

US expected to stick it out with NAFTA

The sixth round of the North American Free Trade Agreement (NAFTA) negotiations ended in Montreal, Canada, on Jan. 26 with no firm conclusions, but there was increased optimism that an agreement would be reached without US withdrawal, reports the US Grains Council (USGC).

The USGC said that this approach (non-withdrawal) is being urged by most of the US business community and, increasingly, leaders in Congress and state governments, stressing the importance of NAFTA, which also includes Mexico and Canada.

It will be remembered that the US, under President Donald Trump, withdrew last year from the Trans-Pacific Partnership trade agreement, whose final revised version was approved by 11 nations on Jan. 23. The withdrawal was criticised by the US beef sector as a "missed opportunity for the United States to gain greater access to some of the world's most vibrant and growing markets".

According to the USGC, US Trade Representative Robert Lighthizer has stressed the need for the NAFTA negotiations to move faster.

The seventh round of talks is expected to start in late February in Mexico City. USGC said Mexican officials had indicated that the negotiations could extend beyond the end of March, when a national Mexican election cycle begins.

List of unresolved issues

With regards to agriculture priorities, it was reported that progress at the NAFTA talks was made on the sanitary and phytosanitary (SPS) and biotechnology language, which are expected to include elements of the negotiated TPP agreement.

However, a laundry list of agriculture-related issues remains to be resolved, including Canadian dairy and poultry, and commodity grading and seasonality issues.

Trump stressed in his State of the Union address last Jan. 30 that trading relationships should be "fair and reciprocal" and pledged to "fix bad trade deals and negotiate new ones". He did not specifically mention either NAFTA or China.

Earlier in an interview with ITV News on the sidelines of the World Economic Forum in Davos, Switzerland in late January, however, he slammed the EU's trade policy with the US as "very unfair".

Also in the same forum, he hinted at rejoining the TPP, saying that his "America First" mantra "does not mean America alone".  Rick Alberto