As Next Round of NAFTA Talks Nears, Farmers Take Action

Groups representing farmers across the heartland have begun to move aggressively to save a the North American Free Trade Agreement—a pact they consider crucial to their industry.

The once-powerful agricultural lobby was somewhat muted in its warnings about losing a significant portion of the $17.9 billion worth of agricultural products exported last year to Mexico—the nation’s third-largest trading partner—believing that the administration would agree on other aspects of NAFTA without damaging agricultural trade.

Now, with the president considering a formal intent to withdraw from the deal, farm groups say it’s clear that their pleas to save the pact have not been heard.

“I’ve come to believe this administration is determined to end NAFTA,” said Gordon Stoner, a fourth-generation Montana wheat farmer who leads the National Association of Wheat Growers.

Many farm groups are mobilizing to stave off what most believe would be a disaster for American farmers.

A reversal on NAFTA would suggest the industry has little influence over the current administration. There’s also a growing recognition that the agriculture industry, while united on the importance of NAFTA, may have failed to coordinate an effective strategy to counter the threat posed to the trade pact.

“The importance of trade to economic growth in the food and ag sector is so fundamental that there tends to be an assumption that everyone understands that,” one association leader told POLITICO. “We can get lazy about meeting our educational challenge in explaining that part of our industry to others.”

But the growing frustration of the agriculture industry has hit what some consider a turning point. It recently released a letter directly challenging Commerce Secretary Wilbur Ross after he publicly disputed the idea that a NAFTA withdrawal would cause a serious drop in exports.

The letter also responded to the possibility that Trump would send notice that the U.S. would withdraw from the pact in order to pressure Canada and Mexico to agree to U.S. demands. Agriculture groups say such a move would be cataclysmic and render meaningless the administration’s continuing promise to “do no harm” to agriculture during this renegotiation. Mexico has said it would walk away from the talks if Trump resorted to that tactic.

“Contracts would be canceled, sales would be lost, able competitors would rush to seize our export markets, and litigation would abound even before withdrawal would take effect,” more than 80 associations wrote in their letter to Ross.

The six-page missive made it clear there was little expectation that the administration would help in trying to preserve NAFTA’s benefits for U.S. agricultural producers, sources said.

“It was a huge departure,” said one strategist. “I see this as a major sea change of people saying the administration is not going to be helpful on this.”

The letter was in fact a culmination of what many agriculture groups have sensed for months: The Trump administration views agriculture’s benefits from the deal more as a bargaining chip rather than something to be defended.

Secretary Ross “told aggies straight up that they’ve just got to get used to the fact that they’re a minor part of the economy and that trade policy isn’t going to be constructed around their interests,” said one industry consultant.

In meetings between Ross and industry groups, he said he believed the U.S. held the leverage based on the volume of food and agriculture products it sold to Mexico. He argued that if the U.S. wanted to press Mexico into making concessions on issues such as auto-part imports, Mexico would agree rather than risk losing inexpensive access to U.S. farm products.

“All the ag groups looked at him (with) their mouths dropped open and said, ‘Don’t you get it? The leverage is in their hands. We are completely dependent on them as this major export market,’” said one person who received the briefing.

Agriculture Secretary Sonny Perdue recently acknowledged Trump’s “bombastic” statements on trade during a meeting with farmers in California, but he predicts a positive outcome from the NAFTA talks.

“The president is determined to get a better deal for American agricultural producers,” Perdue said in a statement to POLITICO. “At the end of the day I think he will achieve that.”

Still, the USDA is developing contingency plans in case of a NAFTA withdrawal.

“We’re talking with the administration and Congress about some mitigation efforts if that were to occur; about how we could protect our producers with that (farm) safety net based on prices that may respond negatively to any kind of NAFTA withdrawal,” Perdue told reporters.

Perdue acknowledged that pulling out of NAFTA could have “some tragic consequences” for U.S. producers but added that he believed that farmers could adapt to changes in the market.

Source: POLITICO