NGFA and NAEGA release joint statement

(Posted on 11/09/18)

The National Grain and Feed Association (NGFA) and North American Export Grain Association (NAEGA) released the following joint statement after the announcement of a preliminary trade agreement between the United States and Mexico:

“The announcement of a preliminary trade agreement between the United States and Mexico represents a significant, positive step in modernizing and further enhancing North American agricultural commerce that benefits the economic growth and consumers in the hemisphere. We hope this agreement contributes to broader discussions on ways to further integrate agricultural markets between the United States, Mexico, and Canada to provide for increased investment, food security and consumer preference.

We are particularly pleased by what we understand to be a number of efforts to preserve and enhance current trade terms in North America. These include: the retention of zero tariffs on agricultural products traded between the United States and Mexico; the addition of 21^st century language to enhance information exchange and cooperation on agricultural biotechnology trade-related matters; an agreement to strengthen disciplines for science-based sanitary and phytosanitary (SPS) measures to facilitate trade; and an agreement that grading standards and services on agricultural products, including grains and oilseeds, will operate independently from domestic registration systems for grain and oilseed varieties. We are hopeful that these benefits will be realized in a final agreement that includes Canada.

Addressing non-tariff trade barriers, as the preliminary agreement reportedly does, is particularly important to facilitating the grain and oilseed trade. We will be reviewing closely the reported inclusion in the preliminary agreement of SPS provisions that would: 1) increase transparency in the development and implementation of SPS measures; 2) advance science-based decision making; 3) improve processes for certification, regionalization and equivalency determinations; 4) conduct systems-based audits; 5) improve transparency for import checks; and 6) enhance the compatibility of SPS measures between the two countries. The new agreement reportedly also would establish a new mechanism for technical consultations to resolve SPS issues between the two countries, which also would be a welcome development.

Despite these clear improvements, we are disappointed by reports that the preliminary agreement removes or weakens key dispute-resolution procedures that currently benefit investors under the North American Free Trade Agreement (NAFTA). These include provisions embodied in Chapters 19 and 20 of the NAFTA. These protections have been utilized successfully by U.S. agriculture to protect long terms investments in Mexico and defend against unjustified legal actions. These protections provide confidence to investors throughout the supply chain and protect industry efforts to create jobs and develop markets throughout North America.

The announcement of a preliminary agreement is an important step toward eliminating tariff and non-tariff barriers in North America. In the coming days we urge U.S. and Mexican negotiators to work with Canada and build on the progress already made by this preliminary agreement. We hope these efforts will tackle existing trade-distortive agricultural policies so that an integrated North American marketplace can flourish under a modernized and more open trading system that is a template for future trade agreements.

NGFA and NAEGA look forward to providing further analysis and input once the full details of the preliminary agreement are released.”