This article appears in the July 2017 issue of Potato Grower.
In April, the Trump Administration shook up the trade world when word leaked that they intended to pull the U.S. out of the North American Free Trade Agreement (NAFTA). This trilateral agreement between the U.S., Canada and Mexico came into force on Jan. 1, 1994. Ultimately, the statements made by the current administration were walked back with a promise from all three nations to renegotiate certain of the deal’s provisions.
Prior to these developments, the National Potato Council (NPC) provided a letter to the president that outlined beneficial improvements to NAFTA for the potato industry. Canada and Mexico are currently the second- and third-largest export markets for U.S. potatoes. Should the U.S. withdraw from NAFTA outright, the current zero tariffs on processed potato exports to Mexico would immediately revert to the “most favored nation” rate. Foreign competitors would quickly seize the U.S. market share in Mexico. In the event of a total loss of U.S. access to those countries, more than $500 million in direct sales of potatoes and potato products could be lost.
The NPC indicated to the White House that “the potato industry believes that potato exports to Mexico could grow to $500 million annually with full unrestricted access for all U.S. fresh and processed potatoes.” In order to make those aspirations a reality, the current restrictions on fresh potatoes would need to be lifted. The ban against U.S. fresh potatoes is based on phytosanitary restrictions rather than on sound science and therefore should be remedied by Mexico.
Additionally, the NPC reminded the Trump administration in its letter of longstanding issues in accessing the Canadian market that could be improved under a renegotiated NAFTA. Those include elimination of the “ministerial exemption” standard that restricts foreign potatoes from accessing certain provinces without an economic evaluation that indicates a lack of domestic supply. This standard reduces U.S. potato exports to the detriment of American farmers and Canadian consumers.
Given that NAFTA is nearly 25 years old, it is reasonable to modernize it in order to address the current and future trade environment. In that effort, the NPC and a variety of partners across U.S. agriculture stand ready to work with Congress and the administration to ensure that the gains we have seen over the life of NAFTA are built upon in order to secure greater benefits for American agricultural producers.
Whether it is NAFTA or other trade relationships, we should be tough and expect fairness from our trading partners whether we are negotiating a new trade agreement or improving an old agreement. We should be firm in ensuring our trading partners keep their commitments. We should never walk away from the process of exploring opportunities to expand our reach to foreign markets that provide new opportunities for exports.
Securing better deals from Mexico and Canada will likely require compromise. The NPC intends to be involved at every step of the process to ensure the final deal means increasing benefits for our members, rural America and our nation’s economy, areas the president cannot afford to ignore.