July 26, 2017

White House Announces Chief Negotiator for Modernizing NAFTA, Ag Interests Say ‘Do No Harm’ – AUDIO

The Trump Administration said Wednesday that talks with Mexico and Canada on an overhaul of the North American Free Trade Agreement  will begin next month.

U.S. Trade Representative Robert Lighthizer said Wednesday that John Melle will serve as chief negotiator in the NAFTA discussions.  Melle is currently the Assistant USTR of Western Hemisphere functions.

U.S. farm groups are greeting the administration’s release of NAFTA renegotiation objectives with a message — “do no harm.”

On Tuesday, members of the House Ways and Means Subcommittee on Trade held a hearing on modernizing the North American Free Trade Agreement.

Wisconsin Representative Ron Kind says the U.S. has recently made some missteps on trade policy by not embracing the Trans-Pacific Partnership trade agreement.

NAFTA Hearing Ron Kind 1

Kind has some advice for the Trump trade team on behalf of the U.S. dairy industry.

NAFTA Hearing Ron Kind 2

Patrick Ottensmeyer, CEO of Kansas City Southern railroad, was recently picked to head a group of corporate leaders focused on trade between the United States and Mexico. He told the subcommittee about the importance of the Mexican market for grain trade.

NAFTA Hearing Ottensmeyer

Cummins, Inc. Chairman and CEO Tom Linebarger spoke about more efficient and effective regulations regarding cross-border trade.

NAFTA Hearing Linebarger


Dairy Leader Outlines NAFTA Renegotiation Priorities at Congressional Hearing – Says 25,000 Dairy Jobs on the Line

The CEO of a major farmer-owned dairy cooperative in Washington state told a congressional panel today that the North American Free Trade Agreement has created jobs and increased sales for his company and the entire U.S. dairy sector, and that a renegotiated treaty must maintain market access to Mexico while also fixing trade challenges with Canada.

“An agreement that has done this much good and that supports more than 25,000 in the dairy sector alone must be preserved,” said Stan Ryan, president and CEO of Darigold in Seattle. Darigold is the third-largest privately held business in Washington state, with total annual sales of $2.1 billion in fiscal year 2017. Darigold markets 40 percent of its milk products outside the United States. The cooperative is a member of both the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC).

On Tuesday, Ryan told members of the House Ways and Means Subcommittee on Trade that Darigold and other U.S. dairy companies have benefitted from NAFTA through “stronger demand for their milk than would otherwise be the case. It is critical that this progress not be reversed and that our fully open access to the Mexican market remain in place.” Ryan’s full testimony can be found here.

“NAFTA has been a driving force behind remarkable growth in dairy exports and is the reason the United States’ share today of Mexico’s dairy imports is 73 percent,” Ryan said, adding that U.S. dairy sales to Mexico have risen to $1.2 billion in 2016 from just $124 million in 1995.

Ryan noted that the preferential tariffs enjoyed by the United States could be undermined if the dairy-specific benefits of NAFTA are watered down in a revised pact. He also said Mexico is currently negotiating a trade agreement with the European Union and exploring possible agreements with New Zealand and Australia. all of which are significant dairy exporters with an interest in expanded sales to North America.

NAFTA is “the vehicle the U.S. will need to ensure that we remain competitive in that market, should Mexico decide to use its ongoing trade discussions with major dairy exporting nations to open up new inroads to its market,” Ryan said.

His testimony also focused on the lack of U.S. dairy access to Canada included in NAFTA, a hold-over from when the agreement was negotiated in the early 1990s, as well as subsequent challenges that have resulted from Canadian policies designed to distort trade.

“NAFTA modernization discussions are an unmissable opportunity to address just that type of unfinished business in order to truly open up the North American market and put our dairy exports to Canada on par with the vast majority of the rest of the U.S. economy,” Ryan said.

In particular, he focused on a new Canadian pricing scheme developed to restrict U.S. dairy protein exports to Canada while also facilitating the disposal of Canada’s excess milk proteins in world markets. This system “is actually eroding what little opportunity the U.S. had for sales in Canada, and even worse, it is being used to underprice dairy products from the U.S. and other major dairy suppliers in markets around the world,” Ryan said.

Canada’s National Ingredient Strategy contravenes the spirit of Canada’s World Trade Organization and NAFTA trade commitments, Ryan said, adding that the new Class 7 pricing strategy allows Canada to sell milk powders at prices intended to undercut competing products from other nations, even though domestically Canada has one of the world’s highest raw milk prices.

“If Canada wishes to retain a government-run system of micro-managing its milk supply, that is its prerogative, but that does not give it the right to use the high returns from that system to disrupt with indirect subsidies the commercial dairy markets on which Darigold and countless other good-faith competitors in the U.S. and elsewhere rely,” he said.

“Common-sense economics would say, if it looks and feels like subsidized dumping, it probably is,” Ryan said. “This just started, and it will damage U.S. dairy export shares around the globe.  We request that Congress work with the Administration to repeal it.”



Lawmakers and Ag Organizations Are Covering a Wide Swath to Gather “Grass Roots” Input for the New Farm Bill – Audio

A list of farm policy changes for the next farm bill, including shifts to commodity and other programs, has been sent to leaders of the House and Senate Agriculture committees by the American Farm Bureau Federation.

The group’s Board of Directors called the proposals “grass roots policy options.”

The North Dakota Farmers Union today kicks off a series of farm bill listening sessions around the state to gather input from farmers and ranchers for the next farm bill.

Six listening sessions have been slated —

July 17            10 a.m.          Roughrider Center, Watford City

July 17               3 p.m.          North Central Experiment Station, Minot

July 18             10 a.m.          Fireside Inn, Devils Lake

July 18               3 p.m.          Hillsboro Event Center, Hillsboro

July 19             10 a.m.          N.D. Heritage Center, Bismarck

July 19               3 p.m.          NDFU Conference Center, Jamestown

Meanwhile, witnesses told the Senate Agriculture Committee last week that federal help for U.S. organic and specialty crop producers is needed with issues like building supply and gaining access to foreign markets.

Multiple witnesses testified about the necessity of programs like the Foreign Market Development program and the Market Assess Program in the new farm bill. Some also talked about the impact of renegotiating the North American Free Trade Agreement and the U.S. withdrawal from the Trans-Pacific Partnership trade deal after President Trump took office.

During the hearing, U.S. Senators Heidi Heitkamp and John Hoeven of North Dakota discussed the importance of the MAP and FMD programs in the next farm bill – with North Dakota potato producer Eric Halverson, CEO of Black Gold Farms, in Grand Forks.

Listen —>  Specialty Crops Farm Bill Hearing