The Trump Administration’s goal to reduce trade deficits by renegotiating the North American Free Trade Agreement is not a good one. That’s the opinion of former top Obama-era trade negotiator Darci Vetter. The Capital Press says Vetter feels that goal may cause unforeseen and unintentional consequences for farm exports. Vetter was the chief U.S. agricultural trade negotiator from 2014 until January of this year. She spoke to delegates at the U.S. Grain Council’s annual meeting, saying that using NAFTA to close trade gaps with Canada and Mexico could snare farm exports in trade disputes. “Personally, I think it’s a misguided objective for a trade agreement,” Vetter says: “I don’t believe the trade deficit is a way of measuring whether or not we’re winning or losing on trade.” U.S. Trade Representative Robert Lighthizer listed deficit reduction as the administration’s number one goal in the negotiations. Vetter says the administration’s goals are “mostly okay.” Some of the goals include maintaining tariff-free trade for farm goods and reducing trade barriers through faster ways of solving food safety disputes. She says the president’s position on trade deficits suggests the negotiations won’t be done this year. Vetter says, “What we have during this negotiating period is uncertainty, and uncertainty is costly.”
A bill endorsed by President Donald Trump that would change the U.S. immigration system may harm farm labor. The bill by Republican Senators Tom Cotton of Arkansas and David Perdue of Georgia would reduce the number of legal immigrants coming into the United States and emphasize highly educated immigrants over what are regarded as the low-skilled laborers, which could be interpreted to mean those in agriculture, according to the Hagstrom Report. The Reforming American Immigration for a Strong Economy, Or RAISE Act, does not target the H2A program, which brings in temporary workers, but the bill would have implications for illegal immigrants who may try to qualify for permanent residency and for the prospect of bringing in workers in the livestock and dairy industries, which need year-round workers. The bill seems likely to meet opposition from Democrats and some Republicans in the Senate, but could start the immigration debate and lead to some method of reform.
Senate Democrats are pushing back against President Trump concerning Cuba, reviving a bill to lift the U.S. embargo. In mid-June, Trump rolled back former President Barack Obama’s historic opening to the island. The group of Senators, led by Oregon Democrat Ron Wyden, introduced the U.S.-Cuba Trade Act of 2017, which would establish normal trade relations with the island nation, in addition to lifting the economic sanctions, according to Politico. Wyden says the embargo “only serves to shut U.S. exporters out of a natural market for American agricultural and manufactured goods.” The International Trade Commission estimated easing the U.S. restriction on Cuba could increase U.S. exports by $1.4 billion annually in the next five years, with even bigger gains possible. However, the bill faces stiff opposition from the Republican Party and the Trump administration.
Mexico says it plans to prioritize free access for goods and services in the upcoming North American Free Trade Agreement Negotiations. Mexico this week announced the nation’s goals for the renegotiation effort, set to begin August 16th. Mexico is also seeking greater labor market integration and a strengthening of energy security, according to Reuters. Additionally, Mexico is looking to unify agricultural, animal and health safety regulations. A document from the economy ministry of Mexico, which outlines the goals, states: “Our objective is to have an expedited negotiation that maintains the benefits that we have achieved during the lifespan of NAFTA,” but also says the renegotiation should serve as a platform for modernization. Those comments are similar to goals expressed by the U.S. agriculture industry. Mexico and Canada, the two trading partners included in NAFTA with the U.S., are the biggest export destinations for U.S. agricultural goods.
Farmers surveyed as part of the Purdue/CME Group Ag Economy Barometer indicated more optimism in July because of better commodity prices expectations this fall. The monthly survey for July reached 139, its highest level since January 2017, and its second-highest level since data collection began in October 2015. The increase continues a trend seen over the summer of more optimism regarding the future of the agriculture economy. The forward-looking measure of sentiment, the Index of Future Expectations, climbed seven points in July to 138. A measure above 100 indicates optimism, while a measure below 100 indicates pessimism regarding the farm economy. In July, farmers were asked if they expect to see higher, lower, or about the same grain, oilseed and cotton prices in the next 12 months. Many indicated they expected to see higher commodity prices through the next year. The improvement in producers’ expectations for commodity prices corresponded with early summer market activity. Wheat futures prices, driven by drought conditions in the Northern Great Plains, have been the most active, but uncertainty about the corn and soybean growing seasons has also contributed to market volatility.
Agriculture Secretary Sonny Perdue is embarking on an RV tour focused on hearing from farmers about the next farm bill. Perdue kicks off the Back to Our Roots RV tour Thursday. This is the first of two RV tour’s that the Secretary will make this summer. The first tour will feature stops in five states: Wisconsin, Minnesota, Iowa, Illinois and Indiana. Along the way, Perdue will meet with farmers, ranchers, foresters, producers, students, governors, Members of Congress, U.S. Department of Agriculture employees and others, according to USDA. Secretary Perdue in a statement says the tour will allow USDA to hear directly from people in agriculture across the country, as well as from consumers. The first tour wraps up in Indiana on Tuesday.
House Agriculture Committee Chairman Mike Conaway says work on the 2018 Farm Bill will start within the next eight weeks. Speaking during a farm bill listening session in his home state of Texas, Conaway told attendees that he wants to get the next farm bill on the House floor this year, according to the Hagstrom Report. After three hours of listening to farm leaders, Conaway added he wants the bill on the House floor this year because he disliked the turmoil of extensions. The 2014 Farm Bill expires on September 30, 2018. Conaway also noted that Senate Agriculture Committee Chairman Pat Roberts of Kansas said last week that he also would like to write the farm bill in 2017. His comments come as the House Agriculture Committee holds two listening sessions this week. The second is planned during the Minnesota Farmfest in Redwood Falls, Minnesota, Thursday.