By Gary Joiner
TFB Radio Network Manager
United States officials aren’t expected to begin negotiating new trade agreements with Mexico and Canada until later in the year, but intentions to rework the North American Free Trade Agreement (NAFTA) have already had a chilling effect on the export sale of American grain, according to the U.S. Grains Council.
“We’re having some difficult conversations down in Mexico. Our customers that we’ve developed over generations, really, are suddenly getting a little bit frosty relationships,” said Thomas Sleight, president and CEO of the U.S. Grains Council, in an interview with the Texas Farm Bureau (TFB) Radio Network. “They’re looking south, instead of looking north, for supplies. We are losing sales. So that’s something that we’re very concerned about.”
U.S. Secretary of Commerce Wilbur Ross has said he hopes to complete trade negotiations with Mexico and Canada in less than a year and that the administration wants to resolve issues as rapidly as it can.
The American Farm Bureau Federation (AFBF) is a strong advocate of fair and open world trade. It believes aggressive efforts must be made at all levels to open new markets and expand existing ones for U.S. agricultural products.
“Again, with Mexico, we’re reinforcing our supply capability. They can get grain by rail, by truck, by sea, however means they want to, they can get,” Sleight said. “We are also reminding folks in the administration, in the U.S. Trade Representative’s office, that trade is important, that trade is important to agriculture and that agriculture is important to the U.S. economy.”
The U.S. Grains Council develops export markets for U.S. barley, corn, grain sorghum and related products, including ethanol and distiller’s dried grains with solubles (DDGS). Sleight said about a third of all U.S. grain is currently going to export markets in one form or another.
He said the international marketplace is responding to U.S. supply capabilities right now. The pace of overall grain exports, he said, is up some 70 percent from 2015 levels.
“Right now, obviously, the price is competitive. Farmers may not like to hear this, but it’s a very competitive price. We have great transportation systems. We have excellent contract sanctity and a great grading system,” he said. “When you put all of those things together, countries really like to work with the United States because they know what they’re going to get from the United States, and they know when they’re going to get it, too.”
Sleight said he hopes positive elements from the Trans-Pacific Partnership (TPP), which the U.S. has withdrawn from, can be salvaged.
“There’s a lot of good negotiating that went into TPP,” Sleight said. “We want to take some of that good work and build on it. And make sure we sustain and expand key markets, like in Japan.”
Founded in 1960, the U.S. Grains Council is a private, non-profit corporation with 10 international offices and programs in more than 50 countries. Its membership includes producer organizations and agribusinesses with a common interest in developing export markets.