NAFTA notice could devastate farm economy
Story Date: 10/30/2017

 

Source: POLITICO'S MORNING AGRICULTURE, 10/27/17

President Donald Trump keeps flirting with the idea of issuing a withdrawal notice from NAFTA as a means of "tough" posturing in negotiations. But even just giving notice, would result in "immediate harm," because "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," a contingent of 86 food and agriculture groups say.

If NAFTA is canceled, the groups contend it would result in a decline of "at least 50,000 jobs in the U.S. food and agriculture industry, and a drop in GDP of $13 billion from the farm sector alone." That was spelled out in a
letter - one sent not to Trump but instead to Commerce Secretary Wilbur Ross, who recently equated a withdrawal from NAFTA for agriculture as something of an "empty threat," writes Pro Trade's Adam Behsudi.

If Trump goes '2205': Mexico in particular has already stated that Trump sending a letter to Congress invoking NAFTA's article 2205 - which would allow Washington to pull out of the deal in six months or later - would lead its negotiators to walk away from the table. And Canadian Prime Minister Justin Trudeau would certainly face pressure to stop negotiating too.


The industry-specific impact: Here are a some big-ticket highlights from the six-page letter that spell out just how much the trade agreement means to crucial rural (and voting) sectors:
- Poultry: In 2016, U.S. poultry exports were 7.95 billion pounds, over 16 percent of total production. Canada was the second-largest market for the chicken industry and in the top five for turkey. Almost 70 percent of U.S. exports of turkey go to Mexico.
- High-fructose corn syrup: U.S. exports to Mexico would decrease by $500 million per year.
- Fruits and veggies: Canada and Mexico account for 18 percent of U.S. fresh fruit exports and 60 percent of U.S. fresh vegetable exports. Since 1993, fruit and vegetable exports from the U.S. to Mexico and Canada have more than tripled, totaling $7.2 billion.
- Beef: In 2016, U.S. beef exports to Mexico and Canada exceeded $1.7 billion and accounted for 27 percent of total U.S. beef exports.
- Dairy: Over $1 billion a year in U.S. dairy products are shipped to Mexico.


























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