The global marketplace has a huge impact on farming and farmers. I like to stay up on current events and can talk about the issues in the news. However, I am finding it a bit challenging to wade past the headlines to find primary source information about issues like NAFTA. I hope this post can start a fact-rich conversation about NAFTA’s history and how the current negotiations could impact farmers.
NAFTA entered into force in January 1994, with the stated purposes of promoting cross-boarder exchanges of goods and services and promoting fair competition between Canada, the United States and Mexico. The agreement also provided a dispute resolution system between the three countries, and created the largest free trade area, in terms of GDP.
Donald Trump campaigned on the notion that NAFTA was the “worst trade deal ever” and in August of this year round one of negotiations began in hopes of revising and modernizing the agreement. Rounds two, three and four have now taken place and it appears that the year-end deadline will not be achieved and new negotiation rounds have been scheduled into the new year.
The latest rounds of talks seem to have ended on a rough note, with several US positions appearing more like demands based on unilateral interests than negotiations for mutual benefit. Specifically of interest to farmers would be:
· A “sunset clause” by which the agreement would be automatically terminated after five years unless the countries all agree to extend it.
· Cutting the dispute resolution mechanism and making participation voluntary for investor/state disputes and advisory for state/state disputes
· Terminating the supply management system in Canadian dairy within a decade.
On a larger scale, the list of “non-starters” for the Canadian and Mexican negotiation teams bring to light the question of what happens to trade if NAFTA is no longer. There are numerous views and projections, but all have far reaching implications for countries around the world, in terms of new or emerging import or export markets. It is critical to remember that the world is small and that decisions in one geographical location or market sector impact us all.