TRACEY CHOW | GOVERNMENT AFFAIRS SPECIALIST GOVERNMENT AFFAIRS
From NAFTA to USMCA: What Has Changed and HowWill It Affect Agriculture? Looking back on the 25-year history of the North American Free Trade Agreement (NAFTA), the data and stories of success are plentiful. In our sector alone, U.S. fruit and vegetable suppliers are exporting nearly triple what was being done pre-NAFTA. That said, NAFTA has long received its fair share of criticism, including from the specialty crop industry.
The Trump Administration has actively pushed a tougher trade stance, even with longtime partners, in order to secure more fairness for American products and workers. NAFTA renegotiation was at the top of the to-do list, and the blanket imposition of tariffs on steel and aluminum imports since March 2018 all but ensured Mexico and Canada would come to the table. All three countries ultimately signed the new US-Mexico-Canada Agreement (USMCA) on November 30, 2018, setting the stage for domestic consideration and ratification. What’s in the Deal As of this writing, the full text of the USMCA has not been released. However, from what has been gathered from official summaries and conversations with officials, the agreement contains, at best, minor yet notable improvements for the U.S. specialty crop industry: • The no-tariff treatment for all specialty crop commodities remains intact, which was our industry’s top request going into negotiations. • The sanitary and phytosanitary chapter contains improvements and more transparency as they relate to import checks, certification processes, bilateral technical consultations, strong scientific justifications, and other provisions. For added perspective, what is included in USMCA is largely similar to what was negotiated under the Trans-Pacific Partnership (TPP). • Significant labor changes are included, predominately to address Mexico’s comparatively lax standards. This includes stronger collective bargaining protections and pathways for each country to sanction each other for violations. If ultimately enforced, this could result in a
double-edged sword scenario for our growers. On one hand, stronger labor laws in Mexico could help shrink the cost-of-production gap between Mexican and U.S. produce, thus helping the latter be more competitive in the market. On the other hand, better wages and working conditions in Mexico could make it more difficult to attract workers to head north, potentially straining the U.S. labor shortage further. • There was no inclusion of new trade remedies for seasonal produce issues, a Southeastern region-generated request that garnered less-than-unanimous support from within (and outside) the specialty crop industry. Ratification Roadmap As is commonplace with any trade deal, ratification in the United States is shaping up to be a rocky road. Arguably the biggest roadblock to a timely passage is the continued imposition of the steel and aluminum tariffs. Industry stakeholders, Mexico and Canadian officials, and prominent members from both U.S. political parties have stated bluntly that ratification cannot—and will not—move forward as long as these tariffs remain. In response, the Administration has refused to remove the tariffs but continues to assure stakeholders that discussions are ongoing with Canada and Mexico to find a solution. Regarding the substance of the deal itself, Democrats have raised concerns across several areas, including provisions on labor, environment, and pharmaceuticals, as well as proper enforcement of the deal. Both leadership and rank-and-file members have demanded that significant changes be secured before a vote moves forward; it remains to be seen through which avenues such demands can be satisfied, short of
28 Western Grower & Shipper | www.wga.com MAY | JUNE 2019
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