Mexico looks to stick it to New NAFTA

The article is from mid-December. I suspect there are other factors here, beyond what's noted therein. Namely, that like a lot of countries Mexico is fed up with U.S. "dumping" practices. And at least equally fed up with its agriculture being at the mercy of the ultra-exploitative greedheads of global Big Ag.

A high-level delegation from the Mexican government is in Washington today to discuss a series of bilateral trade issues, one of them being U.S. government and biotech industry claims that Mexico's intention to restrict imports of genetically modified corn in 2024 violates the new Agricultural Biotechnology provisions in the U.S.-Mexico-Canada Agreement (USMCA) that replaced NAFTA in 2020. Three years ago, the Mexican government announced its intention to phase out the use of the herbicide glyphosate and the importation of GM corn, citing both public health and environmental reasons.

U.S. and Mexican agribusiness interests responded with a demand that the U.S. government threaten Mexico with a USMCA trade dispute, arguing that the new USMCA provisions guarantee their rights to export GM corn to Mexico. Mexico is the largest export market for US corn, nearly all of which is genetically modified. The Mexican government has shown a willingness to negotiate the 2024 deadline, delaying the prohibition on GM feed corn imports, which constitute the vast majority of US exports to Mexico. Industry representatives continue to demand trade action from the U.S. government.

But does the Mexican action actually violate the Agricultural Biotechnology provisions of the USMCA? Senior trade attorney at the Institute for Agriculture and Trade Policy (IATP) Sharon Anglin Treat did a detailed textual analysis of the agreement earlier this year and concluded that Mexico is not obligated to accept GM corn exports from the United States if it has legitimate concerns about public health or the environment. - IATP

How badly might the new NAFTA screw things up?

This is a comprehensive analysis.

Unfortunately, the now-paused trade negotiations with the U.K. and Kenya started from the flawed new NAFTA/TPP template. Tai and the Biden administration are right to pause and review these negotiations and should consult with civil society before developing an entirely new template for trade negotiations. In addition to the “worker-centric” approach that Tai has outlined, a new model must incorporate important principles that President Biden articulated in his Jan. 20, 2021 executive order on modernizing regulatory review.

Biden’s order has been called “game-changing” because instead of focusing review of regulations primarily to reduce business costs it calls for promoting “public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity and the interests of future generations.” In a significant about-face, Biden’s regulatory reform order tasks the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) — which has been a primary force for deregulation and a roadblock to lifesaving regulations for decades — with proactively encouraging agencies to develop rules that benefit the public.

The Office of the U.S. Trade Representative (USTR) should be a first stop on this regulatory review train. The new NAFTA is out of step with the Biden administration’s expressed priorities and cannot be the model for future agreements. Instead of promoting the interests of future generations, racial justice and environmental stewardship, the new NAFTA’s so-called “good regulatory practices” chapter increases opportunities for corporate meddling to slow down, weaken and roll back protective standards. Provisions throughout call for regulatory impact statements, cost-benefit analysis, a rush to market without safety studies, limited labeling of hazards and harmonization of standards with those of other countries or weak corporate-influenced international standards. While the text includes lip service to the importance of public interest regulations, the new NAFTA includes multiple deregulatory provisions that instead fuel a race to the bottom. - IATP

New NAFTA apparently limps to the finish line

To be clear, New NAFTA, aka the U.S., Mexico, Canada Trade Agreement, regarding which a deal was announced yesterday, does have some improvements over the existing one.  According to the text it does, anyway. Whether, for example, new environmental and labor protections will be enforced remains to be seen.

But in other ways it’s not really any better at all. The content of this blog often reflects my interest in farm issues, and that’s where I’m going, here:

But what exactly is the win for farmers in the new USMCA? Nearly all tariffs for agriculture were removed under the original NAFTA. The International Trade Commission, which analyzes trade deals for Congress, projected that the USMCA would result in a slight net deficit for agriculture trade: meaning we would import slightly more than export. The small projected increase in agriculture exports – mostly dairy to Canada – would have no substantive effect on the ongoing, dramatic loss of small and mid-sized dairies in the Midwest.

Grading trade deals solely on the value of goods crossing the border has always obscured the real winners and losers. The original NAFTA, combined with the formation of the World Trade Organization (WTO) and the 1996 Farm Bill, led to the ramping up of agricultural production and an increase in agriculture exports. It also led to an almost immediate drop in commodity crop prices and farmer income. In fact, since the original NAFTA we’ve seen the steady consolidation of agribusiness firms and of farmland ownership, the loss of hundreds of thousands of small and mid-sized farms and independent ranches, and the rapid growth of large-scale concentrated animal feeding operations (CAFOs) fueled by cheap (often below cost) feed. We now have a largely integrated North American agriculture market, where young cattle from Mexico and feeder pigs from Canada routinely cross borders to be finished here. For agriculture, NAFTA’s real winners were not countries, but global agribusiness firms like Cargill, JBS, Tyson and Smithfield that operate in all three countries. - IATP

As far as the politics goes, this isn’t going to be huge for the 2020 election. Nothing else has changed the fact that half of American adults (that is, almost twice the percentage that actually voted for him, in 2016) - including 60% of women - want Trump gone, like, yesterday, whatever it takes, and this won’t, either. We just rightfully loathe and despise the guy, as the utterly repugnant, despicable failure as a human being that he is. But I’m adding this as a politics junkie thing.

Sen. John Cornyn (R-Texas), an adviser to Majority Leader Mitch McConnell (R-Ky.), said a deal that the AFL-CIO's endorsed "could be problematic," but vowed to reserve judgement until senators got a presentation on the agreement. "I just hope he hasn't gone too far in Speaker Pelosi's direction, and the AFL-CIO's direction that he might lose some support here," he said. "My concern is that what the administration presented has now been moved demonstrably to Democrats, the direction that they wanted." - The Hill

Right-wing war on farmers elevates

Some views from the ground on Trump’s trade war. Most farmers' options are of course limited.

The soybean markets have been the source of much heartburn this spring, particularly in (mid-May), when prices rode a rollercoaster of Twitter announcements of additional tariffs and another round of trade mitigation payments to farmers.

Farmer reactions varied widely, from anger and disgust to stoic support and even Zen-like detachment.

"The markets just feel like a punch in the gut right now," said Honebrink. "Every time I get my new budget and plan figured out, markets drop and I have to go back to the drawing board."

Rendel added: "I can't tell you how worried and on edge I am every day watching the markets, wondering what is the next thing I'm going to see on Twitter. I'm walking on pins and needles every day."

In central Ohio, Keith Peters believes not all our trade partners will return when the dust settles. "We have to go forward with the realization that we have lost market share for the foreseeable future," he said. - Progressive Farmer

While it looks unlikely that the “new NAFTA” is going to get through Congress, this has useful facts to bear in mind in any case.

"The ITC computer model forecasting does not include the likely impacts of non-tariff measures in New NAFTA," said Dr. Steve Suppan, IATP senior policy analyst. "New provisions streamline approval of foreign food safety, plant and animal health and animal welfare measures as 'equivalent' despite well-documented evidence they are not. New rules in New NAFTA will lock in a process to further lower U.S. food and agricultural chemical safety standards for decades. Based on the historical record, there is real reason for concern over foodborne illness from imported food and New NAFTA's provisions to enable trade of legally unauthorized products of agricultural biotechnology."

The original NAFTA hurt farmers and hollowed out rural communities in the United States, Mexico and Canada, and despite claims from President Trump and U.S. Department of Agriculture Secretary Sonny Perdue that New NAFTA is needed to fix the farm economy, the ITC report shows this rhetoric does not match reality. In fact, the New NAFTA will entrench underlying structural issues, exacerbating our ongoing farm crisis, plagued by low prices, rising debt and increased bankruptcies. It locks in a system where global agribusiness firms exploit farmers and extract from rural communities in all three nations. - IATP

An addendum:

The second issue is that this year’s plan is expected to mirror that of last year, when Trump handed out $12 billion to address the problem he created. And under last year’s plan, most of that money went to huge corporate farms, including corporate farms owned by foreign companies, and not to small farmers. In fact, as The Des Moines Register reported, hundreds of Iowa farmers ended up with a payment of less than $25. Not $25 million. Or $25,000. $25. Some payments were less than $5. The average payment was $7,236, which is a tiny, tiny fraction of the cost of operating the most modest farm. And even that number was inflated by the large checks written out for the largest corporate farms. 

Trump is handing out $16 billion. It’s a genuinely large amount of money. But it’s too late, it’s going to the wrong people, and it’s still just a tiny fraction of what’s needed to repair the damage that Trump has caused. - Daily Kos