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US NAFTA Ag Rift

DATE: 10/17/2017

By Jerry Hagstrom
DTN Political Correspondent

WASHINGTON (DTN) -- Representatives of the U.S. and Mexican agriculture held a news conference Friday at a high-end restaurant inside the Newseum in Washington to warn that any proposal to allow produce farmers to invoke trade remedy laws over seasonal surges could sink the entire North American Free Trade Agreement.

But a representative of the Florida Fruit and Vegetable Association was on the lower level of the restaurant, ready to tell reporters the story from the perspective of Florida growers, who have urged the Trump administration to put forward that proposal.

Bosco de la Vega, president of Consejo Nacional Agropecuario (CNA), the largest Mexican agricultural organization, called NAFTA a great agricultural success for Mexico, the United States and Canada, and said that the "seasonal-products proposal is a non-starter" for Mexico in the negotiations.

De la Vega noted that Agriculture Secretary Sonny Perdue had said the Trump administration's goal in the NAFTA negotiations is "first of all, to do no harm," and said that the U.S. demand that its "seasonal products" — such as strawberries and bell peppers grown in Florida — be given a special status when it comes to dispute-resolution mechanisms is a threat "so serious" that it could put the entire agreement in jeopardy.

"If NAFTA is overturned for agriculture, U.S. farmers could face the kind of high tariffs that prevailed before the agreement," de la Vega added.

De la Vega also noted that there are divisions within Mexican agriculture and that if the United States insists on a seasonality provision, grain farmers and others in Mexico would ask for similar treatment that would hurt U.S. farmers.

The Mexican agriculture industry also rejects the Trump administration's proposed "sunset clause" under which the agreement would terminate every five years unless countries agreed to continue it.

A sunset clause "would generate uncertainty and instability for investors ... our countries cannot reinvent themselves every five years," de la Vega said.

Backing up de la Vega's comments were U.S. Grains Council CEO Tom Sleight, United Fresh Produce Association CEO Tom Stenzel and representatives of the National Corn Growers Association, the Corn Refiners Association, Mexican avocado growers and fruit and vegetable importers.

Sleight noted that Mexico is the No. 1 market for U.S. corn products and a representative of the Corn Refiners Association said that 75% of U.S. high fructose corn syrup production goes to Mexico. The Mexican market is "irreplaceable," the CRA representative said.

Stenzel of United Fresh, whose national members include Florida fruit and vegetable growers, said he sympathizes with those growers who believe they have been harmed by imports but that "We as an organization are continuing to advance do no harm."

The focus should remain on the consumer, and with the U.S. Dietary Guidelines recommending that people fill half their plates with fruits and vegetables, the American people need year-round availability of fresh fruits and vegetables, Stenzel said.

Irwin Altschuler, a lawyer with Greenberg Traurig, said that if the rules are changed to make it easier for growers to bring dumping and countervailing duty charges over seasonal concerns other agricultural sectors will find ways to bring cases.

Asked by DTN whether U.S. agriculture's position within the negotiations has been hurt by the absence of a politically appointed chief agriculture negotiator, Sleight said that the industry looks forward to the confirmation of Greg Doud to that position but that "we have had good access to the administration" and believe the administration is familiar with agriculture's concerns.

While the news conference took place on the second floor of the restaurant, representatives of the Florida Fruit and Vegetable Association were hovering on the sidelines and on the first floor.

Reggie Brown of the Florida Tomato Exchange handed out comments that the Florida Fruit and Vegetable Association had sent to the Office of U.S. Trade Representative, urging the Trump administration to address problems associated with seasonal surges of Mexican imports into the United States. The letter maintains that Mexico engages in unfair subsidies and makes sales at prices below the cost of production.

Brown also handed out a letter to Trade Representative Robert Lighthizer from Sens. Bill Nelson, D-Fla., and Marco Rubio, R-Fla., pointing out the negotiating objectives under the 2015 Trade Promotion Authority, including "eliminating practices that adversely affect trade in perishable or cyclical products, while improving import relief mechanisms to recognize the unique characteristics of perishable and cyclical agriculture."

He also handed out similar letters from the Florida and Georgia House delegations.

Brown said he, too, had met with administration officials and is "delighted" that they understand the Florida growers' concerns. He described the U.S. agricultural relationship with Mexico as an "ice cream party."

"Everybody has a right to use trade [remedy] laws but perishable products." Others in agriculture, he said, "don't want to let us come the party with a spoon."

Jerry Hagstrom can be reached at jhagstrom@njdc.com

Follow Jerry Hagstrom on Twitter @hagstromreport

(AG/BAS)

Futures

Previous Open High Low Last Change Close
CORN 348'4 348'6 351'4 348'6 349'6 1'2
CORN 362'2 362'4 365'0 362'2 363'4 1'2
CORN 370'6 371'0 373'2 370'6 371'6 1'0
SOYBEANS 984'2 983'6 988'0 983'0 986'6 2'4
SOYBEANS 995'0 994'2 998'4 994'0 997'4 2'4
SOYBEANS 1004'6 1003'6 1008'2 1003'2 1007'2 2'4
WHEAT 430'0 430'4 436'2 429'4 434'6 4'6
WHEAT 449'2 449'4 454'4 448'4 453'0 3'6
LIVE CATTLE 111.475 111.475 112.350 111.300 111.475 0.000
LIVE CATTLE 116.650 116.650 117.400 116.100 116.250 -0.400
LEAN HOGS 63.750 64.000 64.650 63.600 63.975 0.225
LEAN HOGS 68.000 68.125 68.650 67.925 68.300 0.300
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