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With NAFTA in limbo, Mexican millers and feed lot operators have already shifted some corn
purchases to Brazil, and Vince Peterson, USW president, says, “if NAFTA went away, the Mexicans
have surely … already looked into alternatives to find all the wheat and corn and soybeans and
other things – they’re prepared to look at other places” if pre-NAFTA tariffs returned.

There is danger in taking too long to wind up renegotiation, Vetter says. “The longer the status of that
(NAFTA) trading relationship is uncertain, the more incentive we give our customers in Mexico and
Canada … to diversify their purchases. A lot of our products can be found elsewhere,” she points out.

On the other hand, Vetter says, it’s also risky for Trump to push U.S. officials too fast to wrap up
NAFTA’s agricultural provisions because Canada’s trade policies and supply management programs for
dairy and poultry are complex, so agreements on reform take time. Another pitfall, she says, is that some
of NAFTA’s benefits to U.S. farmers could be sacrificed to gains for another U.S. sector as the
renegotiation wraps up.

Most of U.S. agriculture isn’t panicking yet about the NAFTA redo, however. Jim Sutter, chief
executive for the U.S. Soybean Export Council, for example, explains that, during initial fears about
U.S. withdrawal, “we saw some of our customers, particularly in Mexico, looking for alternative
sources. But the fact is, they continue to be very, very good customers … and I think our exports
to Mexico were actually up this past year. We haven’t seen a deterioration there.” In fact, he
pointed out, Mexico has expanded its crushing facilities and now buys less soybean meal but more U.S.
soybeans to crush in Mexico than in years past.

Competitors stepping in as Americans step out

Recently, there have been abundant examples, however, of ways U.S. exporters will be losing out by
sitting on the TPP sidelines.

The Japanese government just finished its first projections of economic growth stemming from
implementing the TPP and a new free trade agreement with the EU, both to likely be implemented in
2019. The gain in real gross domestic product: $114 billion (13 trillion yen), or about 2.5 percent of real
GDP.

On the EU side, gains from that trade agreement will be at U.S. pork producers’ expense, USDA’s
Foreign Agricultural Service projects in a new report. The Japan-EU deal spells a “significant duty
disadvantage” for American pork exporters, since Japan will entirely phase out duties on 60
percent of its pork and pork products in 12 years and lower duties on bacon, ham, and other
ground pork and sausage items.

Japan, meanwhile, is the top U.S. pork export market by value – $1.6 billion in 2017 – and third largest
by volume. So, the impact of greater advantage for the EU, a leading pork exporter, could be substantial.

As noted above, wheat is one of many Washington State farm products that would enjoy better market
access thanks to TPP, and lose ground to competitors without that pact in place.

In fact, like some other products, U.S. wheat’s access abroad has been put at risk by all of Trump’s
major trade initiatives: “Putting it simply, joining TPP is the best way to avoid a potentially
devastating loss of wheat sales to Japan,” said USW Chairman Michael Miller, a Washington State
wheat grower.

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