NAFTA 2.0: Will the U.S. get it right?

Dec 01, 17 NAFTA 2.0: Will the U.S. get it right?

By: FFVA

For two decades, Mexico has benefited from unfair trade practices while Florida farmers have suffered significant loss of market share.  Now with NAFTA negotiations under way with Canada and Mexico, Florida fruit and vegetable growers have a chance for getting some relief.

“Our seasonal growing industries have suffered years of harm and have every reason to expect some help from the government,” said attorney Carolyn Gleason in a Tuesday issues forum, “NAFTA 2.0: Getting It Right.”  She added, “The Trump administration is seeking a separate provision for U.S. seasonal and perishable crops, something that has been advocated by the government for more than a decade.”

Gleason, who heads the Global Regulatory Practice Group and International Trade Practice for McDermott Will & Emery in Washington, said leaders of FFVA and other fresh produce associations are working closely with the administration and Congress on remedial strategies to deliver that relief – inside and outside of NAFTA.

“Never before has this industry’s relief been in such a sharp focus,” she said. “Now is the day for the seasonal and perishable industry to be relentlessly engaged and insistent so that NAFTA 2.0 can finally get it right for your sector.”

Although President Trump has called for the NAFTA negotiations to be conducted “at warp speed,” a new U.S.-Canada-Mexico trade agreement is unlikely to be hammered out in the next few months, Gleason said.  There are also “red line” issues in Mexico or Canada that could kill a NAFTA 2.0 deal at any point along the way.  Once an agreement has been reached, it still would need to be submitted for hearings and approved by Congress and the legislative bodies of Mexico and Canada.

“The reality is that we will not see a NAFTA 2.0 before 2019 or 2020 at the earliest,” Gleason said. “Every U.S. trade deal takes longer than expected to close.

In the meantime, the pace of negotiations will be influenced by shareholder demands in an inflamed trade negotiation environment.”NAFTA-issues-forum

At one end of the spectrum, Trump has called NAFTA “a disaster — the worst trade deal ever,” in part because of the large U.S. trade deficits with Mexico and Canada. On the other hand, many business and political leaders emphasize the benefits of tri-lateral free trade and want to be sure renegotiating the free trade agreement does no harm.

“The only real consensus is that NAFTA needs an update to be brought into the 21st century,” Gleason said. “But the predictions of the outcome range from dire to optimistic. The first two rounds of negotiation have been played on the safe side, and the third round is now under way in Ottawa. I believe that if NAFTA 2.0 crosses the finish line, labor provisions will be part of the agreement.”

Regarding the Trump administration’s threat to exit NAFTA, Gleason said, “Most people believe that is a negotiating tactic. Mexico is our second largest market, sustaining millions of American jobs. Exiting NAFTA would destabilize the markets and would not help specialty crop growers.”

She encouraged FFVA members to play an active role on NAFTA issues. “Your industry leaders are engaged with the administration, with Congress and with the media,” Gleason said. “So stay on it.”

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