Page 37 - Export or Bust eBook

“We need to sharpen that edge every single day because we have people biting at our heels.”

Adding uncertainty to the U.S. leadership position: The Trump Administration’s decisions to renegotiate
the North American Free Trade Agreement (NAFTA) and threaten China and other countries with tariffs
on steel, aluminum and other products – actions that have prompted retaliation against U.S. sorghum
exports and potentially, a long list of other farm products.

In the meantime, other countries and trading blocs have acted to fill some of the gaps.

Weaving the international web of trade

Brazil is already part of Mercosur, a multilateral trade alliance with Argentina, Paraguay and Uruguay,
and negotiators from all four of those countries are in talks with the European Union (EU) - a bloc that
the U.S. is currently butting heads with over steel and aluminum.

“A future EU-Mercosur Association Agreement should boost trade integration among the
Mercosur countries and create new opportunities for trade and investment with the EU by
removing tariff and non-tariff barriers to trade and (foreign direct investment),” according to a
European assessment of negotiations.

Brazil is the largest supplier of agricultural commodities to the EU, a market of 28 countries that U.S.
farmers would like a much bigger share of.

And whereas Brazil is doing its best to surpass U.S. production and transportation systems, the
EU is easily outmaneuvering the U.S. on the international front, nailing down new trade
agreements and expanding markets in Asia, South America and North America.

After nailing down new free trade agreements with Canada and Japan, the EU signed off on a revamped
pact with Mexico last month that has U.S. farmers worried about lost market share.

While the U.S. negotiates with Mexico and Canada to rewrite NAFTA, the EU has swooped in and
finished trade pacts with both of those countries. And in both cases the EU has convinced them to lower
tariffs and erect barriers to U.S. products like cheese.

The Canada-EU trade pact emboldens Europe’s efforts to restrict the use of food names like Muenster
cheese, prohibiting the U.S. from selling those products without renaming them.

The new EU-Mexico accord will spread those restrictions even further in North America, says, Jim
Mulhern, president and CEO of the National Milk Producers Federation.

“This means that our exporters now face fewer opportunities for their products, and trading
partners are emboldened to see how much further they can push the boundaries of creating
nontariff trade barriers,” Mulhern said, reacting to the signing of the EU-Mexico pact.

But EU officials are elated.

"With this agreement, Mexico joins Canada, Japan and Singapore in the growing list of partners
willing to work with the EU in defending open, fair and rules-based trade," European Commission
President Jean-Claude Juncker said.

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