Can updated NAFTA keep US trade flowing?
Negotiations to update the North American Free Trade Agreement (NAFTA) started on 16 August as a result of change demanded by the Trump administration.
The National Pork Producers Council (NPPC) has stressed the need for zero-tariffs on pork traded within North America to be maintained.
The NPPC press notice of 15 August stated how important both Mexico and Canada are to the US pig meat sector, being the largest and fourth largest markets and the NPCC does not want any disruptions. The NPPC is one of the leading organisations supporting the agreement. Since its introduction on 1 January 1994 NAFTA has been a boon to the US economy and growth in total trade has outstripped that with the rest of the world with agricultural products one of the main beneficiaries.
In 2016 Mexico accounted for nearly one third of US exports of pig meat and shipments amounted to 767,000 tonnes including offals. Canada accounted for a further 10% and volumes amounted to 247,000 tonnes. In 1993 exports to these markets only amounted to 106,000 tonnes and 21,000 tonnes respectively. In 2016 the two markets accounted for almost 10% of total US pig meat production.
If there are any major changes to NAFTA this could open the door to the EU which is in the process of negotiating its own Free Trade Agreement (FTA) with Mexico. In 2016 the EU shipped just 2,800 tonnes to this market. For a more in-depth analysis, undertaken by AHDB Market Intelligence earlier in the year, of the implications for US pork trade of any possible policy changes under the Trump administration click here.
Leo Colby, Consultant