While formal NAFTA renegotiation has not begun, there has been movement by the administration to begin reshaping trade deals with both Mexico and Canada since President Trump announced his plans and sent notice to Congress to renegotiate the agreement on May 19.
Commerce Secretary Wilbur Ross and Mexican Economy Secretary Ildefonso Guajardo Villarreal announced Tuesday, June 6, that they came to an agreement to revise a deal regarding the suspension of anti-dumping and countervailing duties on Mexican sugar. In a statement issued by Commerce, Secretary Ross said the revised agreement prevents the dumping of Mexican sugar and corrects for subsidies the Mexican sugar industry receives. Secretary Ross stated that the agreement “addresses the concerns of the U.S. sugar industry and prevents harm to other domestic industry – although Ross noted that the U.S. sugar industry has said it does not support the new deal.
Tuesday’s announcement comes after Commerce notified Mexico in early May that anti-dumping and countervailing duties on Mexican sugar would be reinstated on June 5th if the stalled negotiations did not produce an agreement.
The Agricultural Stewardship Association (ASA) has been joined in its resistance to the proposed agreement by the Coalition for Sugar Reform, a larger assembly of advocacy groups who have long called for U.S. sugar policy to be fixed starting at a more systematic level. The coalition stated that “what the agreement does is solidify that it is time for Congress to shoulder the responsibility of fixing this broken plan in the 2018 farm bill, if not before. U.S. sugar policy should empower America’s food and beverage companies to create more jobs, not put hundreds of thousands of good-paying U.S. jobs at risk just to benefit one small interest group.
On the U.S.’s northern border, after months of Trump’s threats to levy trade tariffs, the first substantial import hurdle was imposed on Canadian lumber. Similar to Mexico’s sugar dumping, Secretary Ross accused Canada of “dumping lumber” into the U.S. It is thought this tariff decision was motivated by Canada’s recent pricing policy change for domestic milk, a move that would affect business for some U.S. dairy farmers.
Several American companies that rely on Canadian softwood lumber say thousands of American jobs are at risk unless Commerce exempts them from the hefty duties imposed by this import tariff. Without an exemption, U.S. bed makers have noted that companies will be forced to substantially raise prices, risking lower sales and job losses. Vice Present of global sourcing for Kentucky-based Tempur-Pedic, Stephen McLaughlin, wrote “disruptions, even if temporary, will eliminate jobs in the U.S. and damage the financial stability of the U.S. mattress manufacturing base.”
On the heels of Trump’s ‘Buy American, Hire American’ plan, American companies who rely on foreign imports may suffer financially and in the process weaken the American job market that is the crux of the administration’s goal to grow.
Formal NAFTA negotiations are not slated to begin until after August 16th, marking the end of the 90-consultation period required by U.S. domestic law.