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Farmers fear Trump's tough trade rhetoric may color NAFTA talks, push for change

  • Corn and key livestock producers say they're generally pleased with what the 23-year-old North American Free Trade Agreement has done to grow trade for their sectors.
  • But some specialty crop producers see "unfair competition" under the current trade pact and warn it could lead to more family farmers being forced out of business.
  • Overall, Mexico and Canada represent nearly one-third of the total U.S. agricultural exports.
Tomato farm
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With talks to revise NAFTA around the corner, there's a worry earlier heated rhetoric from Washington may work against U.S. food and agriculture producers.

At the same time, some ag executives claim parts of the industry are "under assault" due to unfair competition under the North American Free Trade Agreement. They want a modernized trade pact to fix such abuses, such as Mexico's "dumping" of certain specialty crops.

Indeed, President Donald Trump has been vocal too about Canada's "unfair" dairy industry and also picked a bone with Mexico by threatening a border tax to pay for a big new wall. Mexican leaders, meanwhile, have threatened they may look elsewhere for ag products such as corn and may be prepared to act as early as next month.

The first round of talks between Canada, Mexico and the U.S. to revise NAFTA is scheduled to begin Aug. 16 in Washington.

A 'retaliation target'

"We hope that whatever negotiations are conducted here that agriculture doesn't end up being caught up as a retaliation target," Floyd Gaibler, director of trade policy and biotechnology for the U.S. Grains Council said in testimony Wednesday before a House Agriculture Committee looking into revamping NAFTA.

Overall, Mexico and Canada represent nearly one-third of the total U.S. ag exports.

Gaibler said there are indications Mexico is seriously looking for alternative suppliers for not just corn but other grain products. He said Mexico could make the purchase from Argentina or Brazil beginning in August or September.

Corn and corn products today account for more than 30 percent of U.S. farmer income, according to the National Corn Growers Association. Mexico is the top export market for corn, while Canada is also a major market for corn as well as ethanol, the trade group said.

Last year, Mexico ranked as the third-largest agricultural export market for the U.S., while Canada ranked as the second-largest ag customer after China.

For Canada, prepared foods, fruits, vegetables as well as pork and beef were the top-five U.S. exports last year. After corn, soybean was the top ag export to Mexico last year followed by pork, dairy and prepared foods.

A 'godsend' for poultry

One industry that has thrived under 23-year-old NAFTA is the poultry market. Mexico and Canada together account for almost 40 percent of the American broiler exports.

"NAFTA has been a godsend for U.S. poultry," Kevin Brosch, international trade counsel for the USA Poultry and Egg Export Council, testified at the House hearing.

Similarly, the beef industry lobby views NAFTA as a good thing for the industry.

"Quite frankly, it is difficult to improve upon duty-free, unlimited access to Canada and Mexico," testified National Cattlemen's Beef Association CEO Kendal Frazier.

However, that positive take on NAFTA isn't shared by all the agribusiness players.

"While our friends in the grain and meat industry have fared well with NAFTA, the fresh fruit and vegetable industry has been taking it on the cuff, from the standpoint of unfair competition coming into the country," Reggie Brown, a representative from the Florida Tomato Growers Exchange and Florida Fruit and Vegetable Association, told the House panel.

Specifically, Brown said NAFTA is hurting the U.S. specialty crop industry (such as berries, tomatoes and watermelons). He said the situation isn't just hurting Florida growers but other states where specialty crops grow.

According to Brown, Mexico is subsidizing its domestic fresh tomato industry at the expense of U.S. farmers and "dumping" fresh produce into the U.S. market at very low prices. He wants the U.S. to fix the problem.

"We are basically an industry under assault," he said. "We have family farmers being forced out of business by unfair trade practices."