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Key Topic – NAFTA

On May 18, 2017, the Trump administration officially notified Congress of its intent to renegotiate NAFTA. A Federal Register notice was also published with the Office of the U.S. Trade Representative (USTR) accepting public comments on the direction, focus, and content of the NAFTA negotiations. The comment period ended June 14, 2017.

From USMEF’s standpoint, it was absolutely essential that U.S. negotiators protect the benefits that NAFTA has delivered for U.S. red meat exports and work to maintain duty-free access for these products in Mexico and Canada. The U.S. industry must be prepared to defend the favorable terms currently in place for U.S. meat and explain the importance of the Mexican and Canadian markets, which currently take about 40 percent of U.S. pork export volume and 30 percent of our beef exports. (In 2018, the combined value of those exports was $3.9 billion.) In addition, USMEF noted in its comments that NAFTA’s chapter on sanitary and phytosanitary measures should be strengthened and that the agreement should accommodate e-commerce.

UPDATE: On July 17, the Office of the U.S. Trade Representative (USTR) published its list of objectives for the NAFTA renegotiations. On a very positive note, topping the list of objectives for agricultural trade is to maintain existing reciprocal duty-free market access for agricultural goods. USMEF summarized the full list of published objectives in this Exporter Update.

UPDATE: In late August 2018, USTR announced that the United States and Mexico reached an agreement in principle on key issues under discussion in the NAFTA renegotiations. A USTR fact sheet states that tariffs on agricultural products traded between the United States and Mexico will remain at zero. However, Mexico has not yet been exempted from the United States’ steel and aluminum tariffs and so Mexico’s retaliatory duties on U.S. pork remain in place. The Trump administration then notified Congress of its intent to sign an agreement with Mexico. Canada is not included in the agreement, but negotiations with Canada are ongoing.

While USMEF is pleased with the progress in reaching an agreement with Mexico, removing the retaliatory duties on U.S. pork remains the most immediate concern for the U.S. meat industry.

UPDATE: On Sept. 30, 2018, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland announced that the U.S. and Canada, along with Mexico, had reached an agreement in principle on a modernized trade agreement.

In response to the announcement, USMEF President and CEO Dan Halstrom issued the following statement:

According to the Office of the U.S. Trade Representative (USTR), all food and agricultural products that have zero tariffs under NAFTA will remain at zero tariffs under the new U.S.-Mexico-Canada Agreement. While this is very positive news for the U.S. red meat industry, it is important to note that the retaliatory duties imposed by Mexico on U.S. pork and by Canada on U.S. prepared/cooked beef products remain in place. These duties were imposed in response to U.S. Section 232 tariffs on imports of steel and aluminum from Mexico and Canada, and these tariffs also remain in place. USMEF hopes to see this issue resolved soon, so that all U.S. red meat exports will once again have duty-free access to Mexico and Canada.

UPDATE: On Nov. 30, 2018, President Donald Trump, outgoing Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau signed the U.S.-Mexico-Canada Agreement (USMCA). The agreement must be ratified by the U.S. Congress, the Canadian Parliament and the Mexican Senate before entering into force.

While USMCA ensures long-term duty-free access for U.S. pork, beef and lamb entering Mexico and Canada, retaliatory duties imposed by Mexico on U.S. pork and by Canada on U.S. cooked/prepared beef products remain in place. These duties were imposed in response to U.S. tariffs on steel and aluminum imports from Mexico and Canada. Following the USMCA signing ceremony, U.S. Trade Representative Robert Lighthizer told reporters that negotiations continue on the issue of steel and aluminum tariffs.

UPDATE: Lighthizer briefed the House Democratic Caucus on USMCA on March 13, 2019, marking a significant step in the Trump administration’s push for ratification. However, USMCA still has not been formally submitted to Congress, and key congressional leaders have stated that the tariffs on steel and aluminum imports from Mexico and Canada still represent a major obstacle.