Stay calm and keep negotiating’ seems to be the mantra of Canadian farm groups even as a growing number of experts warn NAFTA may be doomed.
U.S. negotiators dropped a series of bombshells in the fourth round of talks on renegotiating the North American Free Trade Agreement — demands that Canada and Mexico had said were non-negotiable “red lines.” Those include a five-year sunset clause; reserving the lion’s share of auto manufacturing for the U.S.; lowering the bar for imposing import barriers against Canadian and Mexican goods; and scrapping supply management.
“We have seen proposals that would turn back the clock on 23 years of predictability, openness, and collaboration under NAFTA,” said Chrystia Freeland, Canada’s foreign minister.
The demands were so extreme, many observers questioned whether the White House is serious about renegotiating NAFTA or just setting the stage for U.S. President Donald Trump to kill the trade deal.
“Issues are being put on the table that are practically absurd,” said Jaime Serra, who was Mexico’s trade minister when the original trade pact was drawn up. “I don’t know if these are poison pills or whether it’s a negotiating position or whether they really believe they’re putting forward sensible things.”
But the chief U.S. negotiator accused Canada and Mexico of being unreasonable and unwilling to give up the “one-sided benefits” of NAFTA.
“Frankly, I am surprised and disappointed by the resistance to change from our negotiating partners,” said U.S. Trade Representative Robert Lighthizer.
But it would be premature to write the obituary for NAFTA, said an official with the Canadian Cattlemen’s Association who has been on the ground during the trade negotiations.
“I’m optimistic. I think it’s too early to make that call as to what is going to happen,” said John Masswohl, director of government and international relations for the CCA.
His organization has been working closely with its U.S. and Mexican counterparts, the National Cattlemen’s Beef Association and the Confederación Nacional de Organizaciones Ganaderas (National Confederation of Livestock Unions).
“The three of us are united in saying that NAFTA is extremely beneficial for cattle producers in the beef sector in all three countries,” said Masswohl. “We like it the way it is. We see some opportunities to improve it, but we like what we have.”
Even while ‘what’s Trump really up to’ theories generate headlines, the CCA has been making the case for improvements to the original trade deal such as eliminating the reinspection of meat at the border. It is also seeking changes that would benefit the Canadian beef industry.
“We’ve made some proposals in terms of having access to the U.S. government procurement market, so for things like federal school lunch programs, military food purchases, all of those sorts of things,” said Masswohl, who is based in Ottawa.
He also noted Washington still hasn’t assembled its full negotiating team, including a chief agriculture negotiator. That role is expected to be filled by Greg Doud, a Washington insider who was once chief economist for the National Cattlemen’s Beef Association and has close ties to the U.S. Senate. Doud is in the process of being confirmed while state directors of agriculture for Nebraska and Iowa have also been nominated to take important trade posts in the administration, which will also be positive, said Masswohl.
“We need folks like that, who know the benefit (of free trade) and can instil the benefit into the U.S. negotiating position,” he said.
The Dairy Farmers of Canada, which has also had representatives at the first four rounds of NAFTA negotiations, isn’t sounding alarm bells yet either.
U.S. negotiators have gone from wanting to modernize the trade deal to pushing for radical change, the organizations’ western Canadian vice-president said at a recent meeting of Manitoba dairy farmers.
“All of you would have heard the U.S. has asked Canada in the last round of negotiations to actually completely open up our market to the U.S., and for the Canadian government that is a complete non-starter… that is something it simply won’t even respond to,” said David Wiens, chair of the Dairy Farmers of Manitoba.
While the U.S. demand to scrap supply management “obviously is something that demands our attention,” he said, “it’s really hard to say how the Americans are going to approach this in the future.”
And dairy, poultry, and egg producers aren’t alone when it comes to demands from U.S. trade negotiators, he added.
“We shouldn’t feel singled out,” said Wiens. “There are other areas of the trade agreement where, as one of the Canadian trade negotiators put it, there are exotic demands — or in other words, ridiculous demands that don’t really make any sense, particularly not in the context of a trade discussion.”
And there’s still a long way to go, said Masswohl, adding efforts of industry groups like his can make a difference.
“A lot of those American jobs depend on Canadian livestock and other inputs coming into the United States, which Americans transform into something else,” he said.
“I’m not sure we have fully heard that yet. There may come a point where that has to happen.”
Other industry groups have decided the time to go public is now. Shortly after the fourth round of talks concluded, a group of automakers — including General Motors, Ford, and foreign companies with U.S. assembly plants — launched a ‘Driving American Jobs’ campaign. Its ad campaign has the theme, ‘We’re winning with NAFTA,’ and is aimed at persuading the American public that the trade deal has proven to be a good deal for the U.S.
“We’ve got to see how this plays out,” said Masswohl. “It’s in the negotiation — we’re not at the end of the negotiation.”
The fifth round of talks will be held in Mexico City beginning Nov. 17.
— With files from Shannon VanRaes and Reuters