If dairy producers are hoping for a trade deal that would level the playing field between Canada and the U.S., they might have had a better shot at it with the Trans Pacific Partnership (TPP) rather than a reworked North American Free Trade Agreement (NAFTA).
Former US Trade Representative Susan Schwab, appearing on AgriTalk today, says “When there were other countries involved there were other things that Canada wanted so it wasn’t just us versus Canada,” she says. “When you are in a multi country deal you can negotiate both bilaterally and you can leverage other countries’ needs and wants to get the best of all possible worlds.”
Creating a trade agreement with Canada is especially critical due to the barriers created by the Canadian supply management system that significantly hampers access to Canadian markets.
President Trump has long made it known that he prefers to deal with through one-on-one bilateral agreements rather than multi-country deals. There have been reports that he wants to approach NAFTA in that way, creating agreements with each country with the hopes of creating greater access to each country’s markets.
Last week the Trump Administration and current U.S. Trade Representative Robert Lighthizer notified Congress of their intention to rework NAFTA. The 25-year old trade agreement with Canada and Mexico has been a topic of considerable debate over the past several months and the eyes and ears of agriculture have been waiting to find out what a new NAFTA will look like.
“It’s a good idea to update a 25-year old deal. By bilateral agreement standards NAFTA is ancient. The key is what do you do with it so you don’t mess it up.”
Schwab says that it’s critically important that Trump Administration remember that Canada and Mexico are our first and third markets for ag exports, respectively.
“We are each other’s most important trading partners. If you put up walls or eliminate NAFTA you will drive Mexico and Canada into other trading partners,” Schwab says. “Slowly but surely they will find alternatives to US products. China is waiting, the EU is waiting and it would happen in a very short period of time.”