Photo courtesy of the U.S. Department of Commerce.
NAFTA is a multi-layer free trade agreement between the United States, Canada and Mexico that came into effect in 1994. It was designed to remove tariff barriers and facilitate the cross-border movement of goods and services among the three countries. There has been controversy over the effectiveness of the agreement in ongoing discussions of potential renegotiations.
Both the American Soybean Association (ASA) and the American Feed Industry Association (AFIA) submitted comments urging focus on maintaining strong trade relationships and strengthening sanitary and phytosanitary regulations.
The ASA underscored the importance of maintaining and building on the extensive agricultural trade relationships that have developed between the United States, Canada and Mexico through NAFTA. ASA’s comments came following announcement by President Trump last month that the United States would move to renegotiate the 24-year-old pact.
The ASA included in its comments a list of benchmarks that reflect the gains already achieved in increasing U.S. agricultural exports to its NAFTA trading partners, and called on the USTR to preserve if not exceed them in the renegotiation. These include maintaining a comprehensive, rules-based approach, and ensuring no backsliding by any party on agriculture or non-agriculture market access commitments.
With regard to biotechnology, the ASA urged the USTR to pursue stronger language on sanitary and phytosanitary standards (SPS) geared toward enhancing cooperation between regulatory agencies and avoiding trade disruptions related to agricultural production technologies. The ASA included suggestions to adopt trade-facilitative residue levels and adventitious presence mechanisms, and to establish in the renegotiation a long-term and formal low-level presence policy (LLP) for biotech trait shipments between the three countries. Looking to support the animal agriculture sector that represents the largest buyer of U.S. soybean meal, the ASA included benchmarks to maintain the successful elements of the agreement with regard to dairy entry into Mexico, while targeting greater market access for poultry, egg, and dairy product exports into Canada.
Beyond its specific recommendations, the ASA cited the dramatic growth of the Canadian and Mexican markets for U.S. soybeans, and for American agricultural products overall, since the implementation of NAFTA in 1993. In 2015, the United States exported $438 million in soy products to Canada, a 220% increase from the $199 million sold in 1987. Soy exports to Mexico in 2015 totaled $2.44 billion, nearly 500% greater than the $489 million sold in 1993.
Joel G. Newman, president and chief executive officer of the AFIA, spoke of support of modernizing NAFTA due to growing competition in the feed sector.
"We need to keep animal food exports strong and growing in the face of intense global competition, and we strongly support the efforts of the Trump administration to modernize and strengthen the U.S.'s trading relationship with Canada and Mexico," Newman said.
The AFIA explained in its comments that there is a strong need to reinforce NAFTA treaty commitments, enforce its trade laws and improve conditions for competition and trade. The AFIA also agrees there are opportunities for improvement within the NAFTA agreement, such as in the areas of sanitary and phytosanitary measures, adopting consistent standards for animal health certification and other technical barriers to trade such as regulatory cooperation.
"Our priority is preserving the existing components of the NAFTA agreement that benefit the U.S. animal food industry, while looking for ways to improve this important trilateral agreement," Newman said. "Since NAFTA was implemented in 1994, animal food exports to Canada and Mexico have almost tripled, growing from $725 million in 1994 to $2.7 billion in 2016."
Mexico and Canada are very lucrative markets for the U.S. animal food industry, representing the U.S.'s largest and second largest export markets, respectively, for animal food, animal food ingredients and pet food. U.S. pet food exports to Canada and Mexico alone represent more than 50% of total U.S. pet food global exports. This success is a direct result of the tariff-free access the United States enjoys with Canada and Mexico.
"Exports in animal feed, pet food, ingredients or meat, milk and eggs equals more jobs in the U.S., which is very positive for U.S. agriculture and the entire U.S. economy," Newman said. "We look forward to working with USTR as the process moves forward."