THE NUTS AND BOLTS OF THE PROPOSED TRADE UPDATE WITH MEXICO

Tricia Braid

Aug, 31, 2018  |  Today's News |  Exports |  Legislation & Regulation |  Farm Policy

President Trump announced earlier this week that he had reached agreement with Mexico on updates to the NAFTA agreement, although he then hinted that he might kill the NAFTA deal after all, if Canada doesn’t come to the table. Here’s a look behind the rhetoric at the details of the deal with Mexico.

 

Of key interest, the newly-announced agreement should benefit American farmers, ranchers and agribusinesses. Most importantly, the provisions largely reflect the priorities of the Council and the Food and Agriculture Dialogue coalition, in which IL Corn participates.

 

First, the agreement keeps existing tariffs at zero on agricultural products traded between the U.S. and Mexico. This was a key, fundamental objective to maintain all existing commitments in a “do harm manner.”

 

Second, the agreement enhances rules for science-based sanitary and phytosanitary (SPS) measures that builds on SPS chapter in the Trans-Pacific Partnership, with itself further enhanced existing commitments to the WTO SPS Agreement.  In particular, provisions were included increasing the transparency on the development and implementation of SPS measures; advancing science-based decision making; improving processes for certification, regionalization and equivalency determinations; conducting systems-based audits; improving transparency for import checks; and working together to enhance compatibility of measures. Most importantly, the agreement would establish a new mechanism for technical consultations to resolve issues between the parties.

 

Third, the agreement includes foundational language that specifically addresses agricultural biotechnology to support 21st Century innovations in agriculture. The text covers all biotechnologies, including new technologies such as gene editing, while TPP only covered traditional rDNA technology. Specifically, the U.S. and Mexico have agreed to provisions to enhance information exchange and cooperation on agricultural biotechnology-related matters. 

 

Fourth, in an effort to reduce the use of trade distorting policies, the agreement includes commitments by each party to not use export subsidies or WTO special agricultural safeguards for products exported to each other’s markets. It provides for improved commitment to increase transparency and consultation regarding the use of export restrictions for security purposes. In addition, if supporting producers, the parties are to use measures that have minimal or no trade distorting or production effects and also ensure transparency of domestic support and supply management programs.

 

Fifth, the agreement provides for non-discriminatory treatment in grading of agricultural products. Both the U.S. and Mexico agree that grading standards and services will be non-discriminatory, including for grains, and that grading will operate independently from domestic registration systems for grain and oilseed varietals.