The North American Free Trade Agreement (NAFTA) opened doors to markets that were once almost completely closed to U.S. corn refiners. Shipments of refined corn products to Canada and Mexico have grown 500 percent since before NAFTA was implemented in 1994 (see graph). Most importantly, Mexico became the leading, irreplaceable market for U.S. corn sweeteners, supporting thousands of jobs for farmers and workers in the United States.
Without NAFTA, tariffs on corn products could nearly double the price for products like high fructose corn syrup sold in Mexico, which would likely take American producers out of the market. NAFTA has been, and continues to provide, a tremendous opportunity for the corn refining industry and for many others in the U.S. food, agriculture, and manufacturing sectors. We believe this progress should continue.
However, while NAFTA has been a success for our industry, we recognize that the global market has changed dramatically since the pact was negotiated 25 years ago. Therefore, we support efforts to modernize and update the agreement to bring it in line with current economic challenges and realities. We believe a successful modernization should “do no harm” to the industries and communities that have had a successful experience with NAFTA, like ours, while seeking to address outstanding problems.
CRA’s priorities for NAFTA:
- Maintaining and Expanding Tariff-Free Market Access for Goods. NAFTA brought down tariffs on thousands of goods, promoting greater commerce and economic integration between the U.S., Canada, and Mexico. The elimination of most tariffs and quotas has been a key driver pushing U.S. refined corn exports up by 500 percent, and all food and agricultural exports up by 400 percent, since NAFTA was signed.
- Modernizing Sanitary and Phytosanitary (SPS) Measures. NAFTA was one of the first modern trade agreements to have comprehensive health and safety standards for plant and animal trade. However, many unscientific, protectionist measures disguised as SPS safeguards have been implemented over the years. We support updating this chapter to bring it in line with modern SPS measures that facilitate exports, protect health, and promote the use of sound science.
- Enhancing Dispute Settlement Methods. Rules are only as good as the tools used to enforce them, so CRA supports preserving all three dispute settlement systems in NAFTA. Dispute settlement can help level the playing field for companies that do business abroad and provide protection for industries that are frequently the target of politically-motivated decisions in foreign countries, like corn refiners. Revisions to these laws should focus on making it easier to remove illegal barriers to exports.
- Addressing Regulatory Cooperation and Technical Barriers to Trade. NAFTA countries should work together to harmonize regulations where possible and to eliminate technical standards that only serve as barriers to trade. In general, regulations should be based on science and implemented transparently, with time for comment and consultation.
- Developing Standards for Biotechnology and Trade Secrets. NAFTA countries should develop standards for handling biotechnology that was not commercially produced when NAFTA was first negotiated. Stronger rules on data sharing and confidential business information can also protect businesses when their information is collected as part of the regulatory process.
We believe that these changes, among others, will help make NAFTA a model 21st century trade agreement and facilitate U.S. food and agriculture’s continuing successes.