USDA Secretary Perdue Says Farmers Won't Get a Worse Deal in Nafta Renegotiation -- Update

By Jacob Bunge Features Dow Jones Newswires

U.S. farmers and ranchers won't be worse off after the Trump administration renegotiates the North American Free Trade Agreement, Agriculture Secretary Sonny Perdue says.

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Mr. Perdue, who was sworn in April 25, said in an interview that President Donald Trump needs to weigh Nafta's impact on all corners of the U.S. economy, not just agriculture. The 23-year-old agreement between Canada, the U.S. and Mexico has underpinned a boom in American crop and meat exports. Some in the farm sector fear revamping the pact could endanger those gains.

"I can assure you that neither this president, nor [Commerce Secretary Wilbur] Ross nor I, are going to negotiate or accept a worse deal than we have it now," Mr. Perdue said. "Our goal is to make it better for all producers."

Mr. Perdue, among the last of Mr. Trump's cabinet members to be confirmed, was thrust immediately into high-stakes trade discussions after White House officials suggested last week that the U.S. might pull out of Nafta.

While Canada's prime minister and Mexico's president urged Mr. Trump not to end the pact, Messrs. Perdue and Ross helped convince him by showing a map of states where jobs would be lost if Nafta ended. Many of those farming and border states backed Mr. Trump in the November election.

Mr. Trump "may have had a perception that Nafta was somewhat disadvantaged in all aspects," Mr. Perdue said. "He gave us more time to negotiate that rather than terminate."

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Nafta has become a critical cog in the U.S. agricultural economy. U.S. farm exports to Mexico were about $18 billion in 2016, according to U.S. trade figures, up from $4.2 billion when the agreement was signed in 1994. Mexico is the top buyer of U.S. corn, pork and chicken, and a major client for U.S. eggs, beef and milk. Canada is a major market for U.S. corn and ethanol.

But Mr. Perdue said other segments of the U.S. farm sector could benefit from a fresh look at Nafta. U.S. dairy farmers face hurdles selling some products in Canada, he said. U.S. sugar producers and Florida fruit producers could also benefit.

"We're going to try and balance the scorecard," Mr. Perdue said. He wouldn't further specify what agricultural markets the U.S. may target in negotiations.

The farm sector has watched for signs that Mexico and Canada are preparing to reduce their reliance on U.S. farm products in case fresh negotiations significantly change the terms of trade.

"We know Mexican authorities have prepared for that," said Soren Schroder, chief executive of Bunge Ltd., one of the largest grain-trading companies. "They can act tomorrow if something happened, and the loser for sure would be the U.S. farmer."

Ron Moore, an Illinois farmer and president of the American Soybean Association, said farmers were open to "modernizing" Nafta. But if the U.S. withdrew completely, "I think it would be difficult to negotiate anything better than we currently have," he said.

Mr. Perdue said he is also working on a proposal to help foreign-born workers to staff U.S. dairies. The issue has been a sore point for milk producers whose year-round operations aren't aided by a seasonal work program geared toward fruit and vegetable growers.

"We'll provide to the president solutions to that that I think will be well-received by American society," he said.

Lawmakers will also soon begin debating the next Farm Bill, a huge packet of legislation that underlies the U.S agricultural economy and other programs such as food stamps. Mr. Perdue said food-stamp assistance, formally called the Supplemental Nutrition Assistance Program, currently contains wide disparities in administration costs between states among other flaws.

"I think there is appetite certainly for a better managed program both from the consumer standpoint and from the [retailer] standpoint," Mr. Perdue said.

Write to Jacob Bunge at jacob.bunge@wsj.com

U.S. farmers and ranchers won't be worse off after the Trump administration renegotiates the North American Free Trade Agreement, Agriculture Secretary Sonny Perdue says.

Mr. Perdue, who was sworn in April 25, said in an interview that President Donald Trump needs to weigh Nafta's impact on all corners of the U.S. economy, not just agriculture. The 23-year-old agreement between Canada, the U.S. and Mexico has underpinned a boom in American crop and meat exports. Some in the farm sector fear revamping the pact could endanger those gains.

"I can assure you that neither this president, nor [Commerce Secretary Wilbur] Ross nor I, are going to negotiate or accept a worse deal than we have it now," Mr. Perdue said. "Our goal is to make it better for all producers."

Mr. Perdue, among the last of Mr. Trump's cabinet members to be confirmed, was thrust immediately into high-stakes trade discussions after White House officials suggested last week that the U.S. might pull out of Nafta.

While Canada's prime minister and Mexico's president urged Mr. Trump not to end the pact, Messrs. Perdue and Ross helped convince him by showing a map of states where jobs would be lost if Nafta ended. Many of those farming and border states backed Mr. Trump in the November election.

Mr. Trump "may have had a perception that Nafta was somewhat disadvantaged in all aspects," Mr. Perdue said. "He gave us more time to negotiate that rather than terminate."

Nafta has become a critical cog in the U.S. agricultural economy. U.S. farm exports to Mexico were about $18 billion in 2016, according to U.S. trade figures, up from $4.2 billion when the agreement was signed in 1994. Mexico is the top buyer of U.S. corn, pork and chicken, and a major client for U.S. eggs, beef and milk. Canada is a major market for U.S. corn and ethanol.

But Mr. Perdue said other segments of the U.S. farm sector could benefit from a fresh look at Nafta. U.S. dairy farmers face hurdles selling some products in Canada, he said. U.S. sugar producers and Florida fruit producers could also benefit.

"We're going to try and balance the scorecard," Mr. Perdue said. He wouldn't further specify what agricultural markets the U.S. may target in negotiations.

The farm sector has watched for signs that Mexico and Canada are preparing to reduce their reliance on U.S. farm products in case fresh negotiations significantly change the terms of trade.

"We know Mexican authorities have prepared for that," said Soren Schroder, chief executive of Bunge Ltd., one of the largest grain-trading companies. "They can act tomorrow if something happened, and the loser for sure would be the U.S. farmer."

Ron Moore, an Illinois farmer and president of the American Soybean Association, said farmers were open to "modernizing" Nafta. But if the U.S. withdrew completely, "I think it would be difficult to negotiate anything better than we currently have," he said.

Mr. Perdue said he is also working on a proposal to help foreign-born workers to staff U.S. dairies. The issue has been a sore point for milk producers whose year-round operations aren't aided by a seasonal work program geared toward fruit and vegetable growers.

"We'll provide to the president solutions to that that I think will be well-received by American society," he said.

Lawmakers will also soon begin debating the next Farm Bill, a huge packet of legislation that underlies the U.S agricultural economy and other programs such as food stamps. Mr. Perdue said food-stamp assistance, formally called the Supplemental Nutrition Assistance Program, currently contains wide disparities in administration costs between states among other flaws.

"I think there is appetite certainly for a better managed program both from the consumer standpoint and from the [retailer] standpoint," Mr. Perdue said.

Write to Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

May 03, 2017 17:32 ET (21:32 GMT)