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Ag sector to keep close eye on NAFA renegotiations

Trucks wait at the international border bridge Zaragoza to cross over to El Paso, Texas, in Ciudad Juarez, Mexico, Dec. 20, 2016. Jose Luis Gonzalez / Reuters

WASHINGTON — Renegotiating the North American Free Trade Agreement is good in theory, but it's too soon to predict how U.S. farmers will be affected, a North Dakota grain grower official says.

"I'm all for going into these agreements and taking a new look at them. But there's just no track record (with the Trump administration) on how it will turn out," says John Weinand, a Hazen, N.D., farmer and president of the state Grain Growers Association.

On Thursday the Trump administration officially began its effort to renegotiate NAFTA with Canada and Mexico. By sending a formal letter to Congress, U.S. Trade Representative Robert Lighthizer begins a 90-day consultation period with Congress, U.S. industries and the American public. That could open the door to renegotiation talks to begin by Aug. 16.

The letter can be read here:

In the letter, Lighthizer says NAFTA should be "modernized to include new provisions to address intellectual property rights, regulatory practices, state-owned enterprises, services, customs procedures, sanitary and phytosanitary measures, labor, environment and small and medium enterprises."

The action to reopen NAFTA was expected. President Donald Trump said repeatedly on the campaign trail that the 23-year trade agreement has sent U.S. manufacturing jobs to Mexico and needs to be redone.

Though manufacturing has dominated much of the discussion about NAFTA, U.S. agriculture has a huge stake, too. The United States sent $20.5 billion in food products to Canada in 2016, making it America's second-largest ag export market. Mexico, which imported $17.9 billion in U.S. food, was the third-largest market. China was the largest market, importing $21.4 billion in American ag products last year.

The importance of ag exports to Canada and Mexico shouldn't be overlooked or taken for granted, says Chip Councell, chairman of the U.S. Grains Council and a Maryland farmer, in a written statement.

"NAFTA is the most critical free trade agreement on the books for U.S. grain farmers, providing open access to countries that are among our top corn, sorghum and barley export markets, as well as significant and growing markets for distiller's dried grains with solubles (DDGS) and meat products made using grain," Counsell says.

U.S. wheat industry officials say renegotiating NAFTA could bring benefits, but they urge caution.

"I cannot emphasize enough how important our Mexican customers are to U.S. wheat farmers," Jason Scott, a wheat farmer from Easton, Md., and chairman of U.S. Wheat Associates, which promotes U.S. wheat exports, says in a written statement.

"There is nothing wrong with modernizing a 23-year-old agreement, but that must be done in a way that benefits the food and agriculture sectors in both countries," Scott says.