The National Grain and Feed Association (NGFA) joined 167 other agricultural organizations and agribusinesses in writing to all 50 governors to express concern about the potential of a withdrawal from the North American Free Trade Agreement (NAFTA).
“We respectfully request that you let President Trump know that you support a modernized NAFTA that maintains and enhances food and agricultural trade between the U.S., Mexico, and Canada, and recognition that withdrawal from the accord would have adverse impacts,” the Nov. 14 letter stated.
President Donald Trump has threatened to invoke Article 2205 of NAFTA, which allows withdrawal from the agreement within six months after providing notice to Canada and Mexico. The fifth round of NAFTA negotiations takes place this week in Mexico.
The NGFA and other agricultural groups told the governors that notice of withdrawal from NAFTA would result in substantial harm to the U.S. economy, particularly to the U.S. food and agriculture sector.
“The adverse effects…would be abrupt and particularly severe for America’s farmers, food manufacturers, and agribusinesses,” the letter stated, noting that a notice of withdrawal would trigger an immediate response in commodity markets, as market-specific focus would turn to a scheduled return to trade-prohibitive tariff rates.
“Contracts would be renegotiated or cancelled, sales would be delayed or lost altogether, able foreign competitors would rush to seize our export markets, and litigation would abound even before withdrawal took effect,” the letter added.
Under NAFTA, American food and agriculture exports to Canada and Mexico have grown by 450 percent and the U.S. holds a 65 percent share of agricultural products in the NAFTA region.
Now, the world grain market is experiencing the greatest oversupply of production since the 1980s – with the U.S. facing increasing competition from foreign competitors – and net U.S. farm income has declined to half what it was just five years ago.
“2018 would be an especially damaging time to lose America’s two largest food and agriculture product markets,” wrote the agricultural groups and companies.
View the full letter, which outlines the detrimental impacts to each commodity that would begin with issuance of a notice of withdrawal from NAFTA.