Ag groups seek consumer help on NAFTA; dairy focuses on fixes
September 15, 2017
Most U.S. agriculture groups hope to convince consumers to help them maintain the current free trade with Mexico and Canada in the North American Free Trade Agreement renegotiation, while the dairy industry will consider the renegotiation a failure if it does not increase market access in Canada for U.S. dairy.
Those were the takeaways from a Washington International Trade Association NAFTA session on Sept. 13, titled "What's in Store for Food & Agriculture?"
Joseph Glauber, a former U.S. Department of Agriculture chief economist who is now with the International Food Policy Research Institute, said, while U.S. agricultural exports are frequently noted, the importance of the trade with Mexico and Canada to consumers is not mentioned enough.
Glauber said he is worried negotiations over other sectors — especially rules of origin for manufactured products — will result in a trade war in which "agriculture will be the casualty."
In a statement that seemed to reflect the views of both panelists and many attendees, Glauber said U.S. trade negotiators "could be doing other things" — reaching agreements with other countries and opening markets — "rather than looking backwards."
"The rest of the world doesn't wait," Glauber said. "They are negotiating other agreements."
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Gary Martin of the North American Export Grain Association said the global grain trade "is the foundation of food security and economic growth around the world," totaling 500 million metric tons — about 18 percent of world consumption for feed and human food.
Martin said during the Trans-Pacific Partnership negotiations last year, he noticed the "atmosphere" started to change in terms of communications about trade and that it has gotten worse this year.
Americans have enjoyed "incredible access to the negotiating process" because Congress has controlled trade agreements. But the communication channels have been interrupted, Martin said, because there are so few trade appointees in the administration and because there are now so many more "vectors" for communication with the public – an apparent reference to social media.
Ag groups need to communicate at the "grassroots level," he said. Both the American Farm Bureau Federation and the National Grain and Feed Association have "learned it is not all inside the beltway, and we have to be engaged locally," he added.
But Martin said the point is not only to get the agriculture community involved in the trade debate. "The informed consumer is going to be critical to understanding the value of trade," he added.
Martin said, while he hopes the NAFTA renegotiation will do no harm, he also hopes it can lead to regulatory reform and coordination and the use of digitization to speed up the flow of information about trade.
Darci Vetter, the U.S. agricultural trade negotiator in the Obama administration and now the diplomat in residence at the Clayton K. Yeutter Institute of International Trade and Finance at the University of Nebraska, said, while NAFTA established free trade for most of agriculture, that was not true for dairy.
Jamie Castenada of the U.S. Dairy Export Council and the National Milk Producers Federation noted his industry comes at NAFTA "from a different perspective" because free trade in dairy was not established under either the U.S. agreement with Canada or NAFTA.
Seeming to address the unspoken view of export-successful farm groups that they wish the U.S dairy industry would not make such a big deal of its problems with Canada, Castaneda told Martin if the groups he represents had the same problems as U.S. dairy, "they would be asking you, Gary, to fix this."
Castaneda said U.S. dairy producers are particularly upset about the way Canada has dealt with ultra-filtered milk, which the United States was exporting to Canada.
Canada's latest dairy action "is so outrageous — a special class for milk to prevent exportation of product from the United States but allows Canada to dump the product on the international market."
Canada has the highest prices in the world for milk but the lowest prices for exporting skim milk powder, he said.
Canadians say U.S. dairy producers should not complain so much because Canada is importing $500 million in dairy products, but Castaneda said that is due to a re-export program in which the processed products are exported back to the United States or somewhere else.
The U.S. dairy industry also wants NAFTA to address the issue of geographical indicators, which the European dairy industry is attempting to use in Canada and Mexico.
But Castaneda signaled that the general issue of market access, particularly the ultra-filtered milk problem, is the highest priority because the new milk classification not only prevents trade but results in "actually dumping product and affecting the international market."
"This is one of the most important elements in NAFTA," Castaneda said. "If this is not addressed, NAFTA will be a failure."