NAFTA Renegotiation Offers Opportunities
The Trump administration intends to take a fresh look at America’s trade relations around the world. In addition to withdrawing from the Trans-Pacific Partnership negotiations, the president and his team told Congress that the process of rewriting the North American Free Trade Agreement (NAFTA) will begin this summer.
In general, the potato industry supports improving the terms of trade that we confront in current and potential export markets. NAFTA has already generated many benefits for the potato industry, as its participants are two of the most valuable markets for potato exports. Mexico is currently the third largest export market for potatoes, receiving over $253 million annually, primarily in processed products. Canada is the second largest market for potatoes, with over $315 million in exports annually. The tariff reductions included in NAFTA played a significant role in raising the value of U. S. potato exports to Mexico from the pre-NAFTA level of $12.1 million to $253 million today.
The phased reduction and elimination of tariffs between the NAFTA countries greatly expanded the trade in potatoes and other agriculture products. Although our industry is clearly in a better position now than before NAFTA, there are greater opportunities for growers under a modernized agreement. In particular, unscientifically based sanitary and phytosanitary (SPS) pest and disease issues are increasingly being used by our trading partners as non-tariff barriers to reduce access to their consumers. As a result, valuable trade opportunities are lost.
Including enhanced SPS standards and science-based procedures for resolving SPS disputes would expand trade opportunities with both our NAFTA partners. A strong “SPS Plus” chapter could streamline the process for distinguishing between legitimate and illegitimate pest and disease issues. If properly constructed, it could also serve as a model for future agreements around the world.
History shows that trade agreements such as NAFTA, the U.S.-Korea Free Trade Agreement and Central America Free Trade Agreement have led to significant increases in potato exports, opening up new marketing opportunities for growers and generating substantial benefits for the U.S. economy. The NAFTA partners represent large, established markets. Support for moving NAFTA and other trade agreements forward means improving upon them and not dismantling them. In the renegotiation, NPC believes that enhancements can and should be made without sacrificing the substantial benefits experienced by the industry. NPC will be actively communicating the potato industry’s concerns and priorities as the process moves forward.
By John Keeling, National Potato Council executive vice president and CEO
