AP NEWS
ADVERTISEMENT

Nebraskans cheer news of trade agreement with Mexico

August 29, 2018 GMT

Nebraska officials cheered the news Monday that President Donald Trump had reached an agreement with Mexico to potentially replace the North American Free Trade Agreement.

Trump announced Monday a trade “understanding” with Mexico that would allow the U.S. to terminate the 24-year-old trade agreement, which the president has called a job-killing “disaster.”

“Today’s announcement that the U.S. and Mexico have reached an agreement on provisions of a trade deal is good news for Nebraska farmers and ranchers who have been anxiously awaiting positive news on the trade front,” Steve Nelson, president of the Nebraska Farm Bureau, said in a news release.

ADVERTISEMENT

Mexico is Nebraska’s second-largest trade partner, taking more than $1.5 billion in exports in 2017, according to the U.S. Census Bureau.

Gov. Pete Ricketts, who recently returned from a trade mission to Mexico, said a new trade agreement with the country is critical to the state’s economy.

“Mexico is one of Nebraska’s best customers, and a new deal will give more certainty to our farm families headed into harvest,” he said in a statement.

Ricketts said he emphasized the importance of NAFTA during the Mexico trade mission, and has previously encouraged U.S. officials to finalize an agreement.

“During our mission to Mexico last week, we talked to leaders in the country about buying more of Nebraska’s quality grains, and we are excited about the prospect of expanded reciprocal trade with this new agreement,” Ricketts said in the statement.

Sen. Deb Fischer, who is a member of the Senate Agriculture Committee, called the announcement a “step in the right direction” and praised Trump for making good on his promise to Nebraska farmers and ranchers.

“I am hopeful this announcement will send a positive signal to our other NAFTA partner, Canada, that the United States is committed to modernizing trade agreements,” the senator said in a news release.

Sen. Ben Sasse said in a release that he’s studying the agreement, but said it may be a step backward from NAFTA for American families.

He questioned details concerning when the deal expires and how the agreement determines the number of parts in cars and other goods to qualify a product as American-made.

For months, the talks were held up by the Trump administration’s insistence on a “sunset clause”: A renegotiated NAFTA would end after five years unless all three countries agreed to continue it. Mexico and Canada considered that proposal a deal-killer.

ADVERTISEMENT

Monday, the Trump administration and Mexico announced a compromise on that divisive issue: An overhauled NAFTA would remain in force for 16 years. After six years, the countries would review the agreement and decide whether it needed to be updated or changed. They then would either agree to a new 16-year deal or the pact would expire.

Still up in the air is what will happen with Canada.

Trump said Monday that he’s open to including Canada in the deal with Mexico or negotiating a separate deal as long as the country will “negotiate fairly.”

Canada said Monday that its foreign minister, Chrystia Freeland, would cut short her diplomatic trip to Europe to head to Washington on Tuesday for trade talks with the United States.

It’s unclear whether NAFTA can be replaced or renegotiated without Canada’s participation.

From Nebraska’s point of view, Canada is a key trading partner.

It is the state’s No. 1 export market, taking nearly $1.6 billion in Nebraska-produced goods in 2017.

The U.S Chamber of Commerce also estimated in a report released earlier this month that Nebraska exports to Canada were most at risk to potential tariffs.

The report estimated more than $214 million in potential exports to Canada were threatened by tariffs, more than those to Mexico, China and the European Union combined.

Nelson, the state Farm Bureau president, said that while the deal with Mexico is an important step for Nebraska farmers, “it’s critical that Canada come back to the negotiating table.”