Withdrawing from the North American Free Trade Agreement would be devastating to U.S. agriculture was the message a group of 86 farm organizations and agribusinesses delivered in a letter to Secretary of Commerce Wilbur Ross. The group says, “We are sadly confident that issuance of a notice of withdrawal from NAFTA would trigger a substantial, immediate response in commodity markets as the market-specific focus would turn to a scheduled return to trade-prohibitive tariff rates. 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.”
One of the reasons for the letter is the growing concerns in agriculture of the administration’s NAFTA strategy after recent comments by U.S. Trade Representative Robert Lighthizer and Ross. Lighthizer says, “If we end up not having an agreement, my guess is that all three countries will do just fine. There’s a lot of trade. There’s a lot of reasons to trade.” At a recent event in Washington, D.C., Ross says, “As far as I can tell there is not a world oversupply of agricultural products.” He called the potential dangers of a NAFTA withdrawal to food producers an “empty threat.”
According to a study by ImpactECON, if Canada, Mexico and the United States return to “most favored nation” tariff rates upon any withdrawal from NAFTA, the negative impact on the United States would outweigh any benefits. It would include a net loss of 250,000 U.S. jobs, a net loss of at least 50,000 jobs in the U.S. food and agriculture industry and a drop in Gross Domestic Product of $13 billion from the farm sector.
Impact on various industries if the United States withdraws from NAFTA:
• Corn: U.S. production would fall by an average of 150 million bushels annually, erasing $800 million in value and increasing the need for farm program payments by $1.2 billion.
• Pork: Iowa State University estimates a decline in total U.S. pork production by 5%, resulting in an aggregate industry loss of around $1.5 billion, jeopardizing more than 16,200 U.S. jobs.
• Beef: Tariffs would be above 20%, causing a reduction in beef exports, and a contraction in U.S. beef production.
• Poultry: Disruption in trade would be devastating to U.S. poultry. Mexico imported 23.5% of all U.S. poultry exports, and Canada imported 5% of U.S. poultry exports.
• Dairy: If Mexico reverts to MFN status, applied tariffs will range from 20-60% on cheese and up to 45% for skim milk powder. Mexico is the No. 1 market for U.S. dairy.
Those signing the letter included American Farm Bureau Federation, American Soybean Association, Animal Health Institute, National Association of Wheat Growers, National Cattlemen’s Beef Association, National Corn Growers Association, National Milk Producers Federation, National Pork Producers Council, National Renderers Association, North American Meat Institute, National Turkey Federation, and U.S. Meat Export Federation.
Reorganization of Codex Office and GIPSA-AMS on hold
Secretary of Agriculture Sonny Perdue has told the Senate Agriculture Committee that he plans to take more time to consider shifting the Codex office from USDA’s Food Safety and Inspection service to the undersecretary of Trade and Foreign Agricultural Affairs and merging the Grain Inspection Packers and Stockyards Administration with the Agricultural Marketing Service. In a letter to the committee, Perdue says the proposals “merit further discussion given the issues raised by stakeholders.”
The majority of public comments favor the proposed plan to move the Codex office to the new undersecretary of Trade. Opponents, however, are concerned that moving the office could prioritize trade issues over food safety matters.
The proposals are part of the reorganization plan that Perdue announced earlier this year.
Cruz puts hold on Northey nomination
Sen. Ted Cruz has put a hold on Bill Northey’s nomination as undersecretary of Farm Programs and Conservation due to assurances the Trump administration gave the Iowa senators and governor on biofuels policy.
Clovis withdraws from consideration
Sam Clovis withdrew himself from further consideration as USDA’s undersecretary for Research, Education and Economics. In a letter to President Trump, Clovis says, “The political climate inside Washington has made it impossible for me to receive balanced and fair consideration for this position. I am grateful to Secretary Perdue and you for having the confidence in me to nominate me. I also wish to thank Sen. Pat Roberts for being in my corner along with the other Republican members of the Senate Committee on Agriculture, Nutrition and Forestry. It saddens me that circumstances will not allow me to fulfill your, or their, expectations in that role.”
Opposition to Clovis has been increasing the past few weeks concerning that he did not have a background in science and the recent development that he was one of the campaign officials referred to in court documents as it related to George Papadopoulos’ campaign activities in the Russia investigation.
Clovis was the key agriculture adviser to then candidate Trump and recently has served as White House adviser to the USDA.