Seeking to preserve the best in NAFTA and modernize the rest

22.03.2017

A panel of grain industry and railroad executives, addressing members of the National Grain and Feed Association during their annual meeting in New Orleans on March 19, said it was essential to preserve the tremendous benefits the North American Free Trade Agreement (NAFTA) has provided the economies of the United States, Canada and Mexico, especially the food and agriculture sector, in any renegotiation or talks aimed at adjusting terms of the 23-year-old agreement. The executives acknowledged there are areas where NAFTA may be improved but that now was the time for the grain and transportation industries to reach out to the new administration and Congress to explain just how important NAFTA has been in vastly increasing trade between the partner countries while providing good-paying trade-related jobs.

Pat Ottensmeyer, president and chief executive officer, Kansas City Southern Railway, Kansas City, Missouri, U.S., moderated the session and was joined on the panel by John Murphy, senior vice-president, international policy, U.S. Chamber of Commerce, Washington, D.C., U.S., and Gary Martin, president and chief executive of the North American Export Grain Association, Washington, D.C.

Ottensmeyer said half his railway’s operations are in Mexico, Kansas City Southern Railway having invested heavily in developing its railway in Mexico and counting on Mexican industry and agribusiness to provide many of its largest customers. He pointed out his railroad transports 35% of U.S. corn exported to Mexico. He said four of five of this railroad’s discrete capital projects currently planned or under way will be in Mexico. These projects will continue unless Mexican customers pull back in the event trade conditions deteriorate.

Ottensmeyer recently visited with several members of the Trump administration and congressional leaders and said there was a willingness to listen to industry’s concerns. He said it was essential other corporate executives to press their case now in Washington.

Murphy pointed out the value of trade between Mexico, the United States and Canada averages $3.5 billion a day. The economies of the three countries are tightly bound to one another.

“We make things together,” Murphy said.

There are several areas where NAFTA may be improved, Murphy added, recalling NAFTA was negotiated before the internet and e-commerce burst upon the scene. But the effort should be to improve what’s in the agreement while making needed adjustments. Murphy warned business should forthrightly reject any notion of breaking up NAFTA in favor of bilateral agreements, one with Canada and one with Mexico.

Martin encouraged NGFA members to participate with the U.S. Food and Agriculture Dialogue for Trade, which seeks to education policymakers on the importance trade and trade agreements. These extend beyond NAFTA to include other trade agreements and the Trans-Pacific Partnership process, which continues even after the withdrawal of the United States. It’s time to redouble efforts, Martin said.

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