Trade tensions continue to heat up and that is lowering commodity prices and elevating tensions on American farms. USDA Under Secretary for Trade and Foreign Agricultural Affairs Ted McKinney addressed a Michigan Farm Bureau group this week and said all of the outstanding trade negotiations are important, “but by necessity I think we have to land NAFTA first. I would say, right in tandem China, with the timing on these tariff implementations, is equally important. And I only raise NAFTA not to diminish the importance of Japan or any other country, it’s just that most other countries are looking to see how NAFTA settles before they’re going to be willing to negotiate.”
He went on to say that the U.S., Mexico and Canada are good friends but likened the NAFTA struggles to a fight between brothers. McKinney is optimistic about a resolution.
“I do believe we’re going to settle NAFTA in one form or another. Now I think ideally everybody would say let’s land this thing all three holding hands, singing Kumbaya and going forward. It may also be a two-step approach, do one country and then the other. But, if you are possibly wondering whether opening up or modernizing NAFTA was a good thing or a bad thing, I’ll tell you that for right now, it’s a darn good thing.”
He cited examples of biotech and sanitary & phytosanitary standards, not originally in NAFTA language, as important reasons to re-negotiate.
The office of the US Trade Representative is responsible for negotiating trade agreements, so McKinney is not familiar with all of the language, but he is confident there will be future compliance with what is in the new agreements.
“Yes, I think so,” McKinney said, “but let me also back up and say we have enforcement mechanisms now, and have had for years, that just have not been used. So, you can put the toughest language in a NAFTA 2.0. You can put the toughest language in an agreement with China or Japan or whomever, but if there’s not the political will to follow up and enforce the darn thing, once you are operational, then what’s the value of the agreement.”
McKinney’s biggest concern with NAFTA is Canada. In his remarks he asks the Canadians to be fair and fix their Class 7 milk pricing system. Hear all of the remarks here (thanks to the Michigan Ag Information Network):McKinney-at-Michigan-Farm-Bureau