Agriculture can’t afford for any harm to be done in upcoming North American Free Trade Agreement (NAFTA) renegotiations. And it appears the Trump Administration has heard that message and plans to carry that out in its marching orders.

The Office of the U.S. Trade Representative this week announced that the first round of North American Free Trade Agreement (NAFTA) renegotiations among the United States, Canada and Mexico will open on Aug. 16 in Washington, D.C. John Melle, the assistant U.S. trade representative, will serve as the chief negotiator as Gregg Doud, Trump’s nominee to serve in the post has not been confirmed by the Senate yet.

As required by Congress, 30 days before negotiations can begin, USTR released a detailed and comprehensive summary of the negotiating objectives for the renegotiation of the NAFTA. For agriculture, the goals were welcomed due to the attention on market access and sanitary and phytosanitary (SPS) measures.

At the top of the list of negotiating objectives for agriculture is to maintain the existing reciprocal, duty-free market access for agricultural goods. Another objective looks to expand competitive market opportunities for U.S. agriculture substantially equivalent to the competitive opportunities afforded foreign exports into the U.S. market by reducing or eliminating remaining tariffs.

Related:NAFTA renegotiation looks to start in August

The objectives also look to eliminate non-tariff barriers to U.S. agricultural exports, including discriminatory barriers, restrictive administration of tariff rate quotas and other unjustified measures that unfairly limit access to markets for U.S. goods, such as cross-subsidization, price discrimination and price undercutting.

“We are pleased to see efforts to address unjustified measures that unfairly limit access to markets for U.S. goods, such as price undercutting, included in the Administration’s negotiating objectives. We believe these goals will allow the administration to address Canada’s new milk pricing policy, referred to as Class 7, which has allowed Canadian companies to sell their products below world market prices," said Dr. Michael Dykes, president and chief executive officer of the International Dairy Foods Association.

One of the stated goals of the SPS measures is to establish a mechanism for expeditiously resolving unwarranted barriers that block the export of U.S. food and agricultural products. It also calls for a mechanism to improve the dialogue and cooperation on addressing SPS issues and facilitate trade, where appropriate and possible.

Trump’s negotiating tactics

Steve Dittmer, executive vice president of the Agribusiness Freedom Foundation, said there’s a lot of concern in the countryside regarding Trump’s “protectionist instincts and how it might affect NAFTA.”

“Rather than misleading or confused policy, it appears this administration likes to get smaller issues resolved or on the way to solutions before tackling big negotiations,” Dittmer said. “One also has to keep in mind that Trump likes negotiating partners off balance going in, lets them know he is prepared to walk before they even sit down and doesn't tip his hand any more than necessary, even to his supporters. He must have hated having to spell out his NAFTA objectives beforehand but that was part of NAFTA law.”

Dittmer explained the administration does have a track record of very specific, tangible achievements, “rather than big, ceremonial meetings and proclamations that have no teeth,” he said.

Maybe one of the most concerning discussion points in the negotiating text is that of accounting for trade deficits. Through the renegotiation of NAFTA, USTR said the Trump Administration will seek a much better agreement that “reduces the U.S. trade deficit and is fair for all Americans by improving market access in Canada and Mexico for U.S. manufacturing, agriculture and services.”

Dittmer noted trade between two countries is never going to be perfectly split – one country will end up with more stuff and full warehouses and the other will have more cash and more empty warehouses.

“Some trade experts are afraid we're going to leave some country with surplus cash on their hands. They remind of us of the real poker shark who wants to extract everything from the player and leave him dead broke and angry. Then there is the professional gambler who would like to leave the player some money left and the inclination to come back and play some other time. Why should the United States play the role of shark?” Dittmer said.

Reliable players

When speaking with former Secretary of Agriculture Mike Johanns in recent days, he said in his experience, foreign governments always emphasized how important a reliable chain of supplies is in creating a predictable, dependable partner. “That’s what’s worried me with trade discussions today,” he warned, acknowledging with countries such as China and Mexico firmly everyone should get a fair shake in trade.

However, he noted, “If we go too far, agriculture is at risk and will pay a price,” he said, adding it is too easy that if someone says you hammered our steel industry, we will hammer your ag industry. “Trade operates on a golden rule. Do unto others as you expect them to do to you. With trade there’s almost always a push and pull. If you push, people tend to fall back or push against you. There’s never an isolated event in trade.”

Stan Ryan, president and CEO of Darigold in Seattle, Wash., said modernizing NAFTA requires an overall trade policy that reinforces that the United States desires to be reliable, something that is at risk in the current environment

“Consistent market access and a level playing field is vital to our prosperity,” testified Ryan before a House Ways and Means subcommittee on trade hearing July 18. “Withdrawing from NAFTA would undermine significant progress. Even status quo posture risks setbacks,” he said, adding that global competitors are emboldened to take advantage of the marketplace if the United States no longer enjoys a competitive advantage.

Mexico is currently negotiating a trade agreement with the European Union and exploring possible agreements with New Zealand and Australia, all of which are significant dairy exporters with an interest in expanded sales to North America.

NAFTA is “the vehicle the U.S. will need to ensure that we remain competitive in that market, should Mexico decide to use its ongoing trade discussions with major dairy exporting nations to open up new inroads to its market,” Ryan said. “We need to remove any uncertainty of our commitment to Mexico, reinforce our relationships and support our trade flows,” Ryan told the subcommittee.

Ryan said the reliability of the United States as a trading partner has been brought into question and is at stake right now. “I believe we need to treat this NAFTA negotiation as an opportunity to reinforce that we are a reliable trading partner who will always be there and will work to improve.”

Jason Perdue, a row crop, beef and poultry farmer from York, Nebraska, also highlighted for the committee the importance of NAFTA and expanding market opportunities for America’s farm and ranch businesses. AFBF voiced support for eliminated or reduced Canadian tariff barriers to dairy, poultry, eggs and wine, as well as the recently implemented barriers to ultra-filtered milk.