Progress in the latest North American Free Trade Agreement (NAFTA) talks remains limited as the 6th round of trade talks got underway in Montreal this week.
With President Trump threatening to call time on the 24-year agreement unless progress is made, pressure is mounting for a breakthrough deal but the poultry sector could have a large effect on the final results of the talks.
The US sent about $800m in chicken and turkey meat to Mexico in 2016 with the country buying more US chicken than the next 2 markets combined. If NAFTA disappears, US poultry could face increased competition from Brazil, the world’s leader chicken exporter, which has tariff-free access to the Mexican market until 2019, as well as lost jobs.
With the Chinese market still virtually closed to US poultry, despite Beijing lowering its still anti-dumping tariffs on US broilers, some observers speculate the potential impact of a NAFTA collapse on agriculture could prompt the Trump administration to ultimately stick with the deal.
Many farming organisations are keen for NAFTA to remain. US-based Farmers for Free Trade said farmers and ranchers would feel huge pain if America withdraws from the pact. Texas, Georgia, Arkansas and Mississippi – all 4 Republican strongholds that voted for Trump – are the largest poultry exporters to Mexico
“NAFTA withdrawal would result in a massive tax on the products American farmers grow and produce. These taxes would lead to fewer products sold and declining profits. They would result in our farmers selling less to Mexico and declining prices, which is the last thing farmers can afford,” said former US senators Max Baucus (Dem) and Richard Lugar (Rep).
Zippy Duvall, poultry and cattle farmer in Georgia and president of the American Farm Bureau, said it was now time for Canadian negotiators to engage fully in the talks and move issues forward.
Read more: US poultry groups support changes for NAFTA
“The United States has offered a proposal to update rules concerning trade disruptions due to animal and plant health risks. We’re asking Canada to improve market access by eliminating tariffs on dairy and poultry going into Canada.”
In a blog published this week, Mr Duvall said NAFTA had been a big success for US agriculture and Canada and Mexico were the nation’s number 2 and 3 markets for agricultural exports but there other trade deals could be even more promising.
“The sooner we wrap up the NAFTA negotiations, the sooner our trade officials can turn their attention to negotiating new trade agreements focused not just on improving the markets we already have, but on expanding access to markets that promise growth for US exports all around the globe.”
The US National Chicken Council tweeted this week that Mexico and Canada were 2 of its most important US chicken export markets, linking to a statement last year that said poultry exports were among the most vital of all US agricultural exports.
The Montreal Economic Institute said it was time for both the US and Canada to make concessions. It argued this week that the abolition of supply management would put Canada in a better position to counter American protectionist tendencies in the car and softwood lumber sectors.
Also read: Demands that Canada buys more chicken and eggs from the United States were a key element of the 5th round NAFTA negotiations. read more
“This would be a win-win for Canadians, because the system of quotas and tariffs imposed on dairy products, eggs and poultry blocks the entry of foreign products and costs Canadian consumers over $3bn a year, according to the OECD,” said Alexandre Moreau, public policy analyst.
But Canadian International Trade Minister Francois-Philippe Champagne said Canada would be firm in support of its supply management regimes for poultry, eggs and dairy sectors.