Trump sparks rush of NAFTA lobbying (via The Hill)

Lobbyists are gearing up for the looming renegotiation of the North American Free Trade Agreement (NAFTA), a sweeping trade pact of critical importance to the United States, Canada and Mexico.

Trade officials from the three nations will take the lead at the negotiating table, but business leaders are already working to build consensus around possible changes to the agreement.

About 175 companies and groups in the U.S. listed lobbying federal officials on NAFTA from June 2016 through the beginning of this year. Roughly a dozen other entities have recently hired Washington lobbyists, including states, provinces and business groups in Mexico and Canada.

President Trump has called NAFTA “the worst trade deal ever,” and he threatened to ditch the deal before finally agreeing to renegotiate after talking to Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto.

“I don’t think a [Hillary] Clinton administration would have prompted Canadian provinces to hire a lobbyist,” said one lobbyist working on NAFTA negotiations who asked for anonymity to speak freely.

Lobbyists and government negotiators for Canada and Mexico have bristled at Trump’s criticism of NAFTA but say working with Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer has given them hope about moving forward.

“Trump’s personal style is an important challenge to any negotiation,” said Luis de la Calle, a consultant who was part of Mexico’s original NAFTA negotiating team. “There’s a difference between today and 25 years ago. That negotiation was complicated, but all three governments had the same objective.”

Canada’s federal government has not hired any U.S. firms so far. Mexico employs a few D.C. firms working on trade, including Public Strategies Washington, though diplomats are leading the charge on the talks.

Some of the lobbying on NAFTA is coming from individual regions that would be affected by changes to the deal.

The state of Sinaloa, which is the largest agricultural producer in Mexico, has hired Mercury, which has former Mexican government official Luis Rosendo Gutiérrez Romano as its managing director, to lobby on its behalf.

Similarly, New Brunswick, a Canadian province, hired the law firm that boasts the former U.S. ambassador to Canada. That firm, Nelson Mullins Riley & Scarborough, already represents the Canadian province of Saskatchewan. Additionally, Ontario — which trades with more than two dozen U.S. states and is home to Canada’s capital of Ottawa — recently hired the lobbying firm West Front Strategies.

U.S. business leaders and officials in Mexico and Canada insist that negotiations, which aren’t expected to start until at least August, must not result in going back to the high tariffs and other trade barriers that were in place before NAFTA.

Experts in Mexico are drawing a hard line: “Neither tariffs nor quotas of any kind will be negotiated,” de la Calle said.

The White House notified Congress on May 18 that it plans to renegotiate the 23-year-old trade deal, kicking off a 90-day countdown clock before official talks can begin.

Most groups are keeping their powder dry on specific issues, and lobbyists say that discussions remain broad in scope and focused on modernizing the agreement.

Businesses and governments — down to the state and local level in all three countries — agree they want to work quickly on NAFTA before elections in Mexico and in the U.S. next year so that all three nations can stay in the deal, allowing the current trading system to continue uninterrupted.

Mexico will elect a new president and Congress next July, while the U.S. congressional elections will follow in November.

Jodi Hanson Bond, senior vice president for the U.S. Chamber of Commerce’s Americas Division, said updating the trade agreement means starting from scratch to convince policymakers of NAFTA’s value.

“I think for a couple of decades we’ve taken for granted that things were going so well that we didn’t take the time to communicate or educate on why it mattered to our economic platform together,” Bond said.

“This has given us a chance to get back together, and it’s really unified the private sector and collaboration with the government at a real local level,” she said.

Earlier this month, the U.S. Chamber of Commerce announced the creation of the U.S.-Mexico Economic Council, led by top companies in both countries, and the North American Economic Alliance with the heads of Canada’s and Mexico’s chambers.

And in April, the Mexican Chamber of Commerce, the Consejo Coordinador Empresarial, hired its first lobbying firm — top K Street shop Akin Gump — to work on NAFTA-related issues.

“On the record, they’re going to be optimistic,” said another trade lobbyist about those involved in the talks. “There’s nobody in industry who’s asking to renegotiate NAFTA. Nobody wanted to renegotiate NAFTA.”

“They’re trying to keep a stiff upper lip. They’re not really thinking about if and when they conclude this thing,” the lobbyist said, expressing concern that a renegotiated NAFTA may face hurdles on Capitol Hill.

Most industries are urging officials to tread lightly on overhauling the agreement, which they say has been successful but needs updates to account for the technological advances of the past 25 years.

The agriculture sector is “not the industry pushing for large wholesale changes to NAFTA,” said Veronica Nigh, an economist at the American Farm Bureau. “Now that we’re here, there could be some changes around the edges.”

The farm group is mostly hoping not to lose “the really significant gains” it has made since NAFTA was adopted. U.S. agriculture exports to Canada and Mexico have increased 300 percent since NAFTA was enacted, Nigh said.

David MacNaughton, Canada’s ambassador to the United States, said he is tapping into support in Congress and the U.S. business community to smooth negotiations with the Trump administration.

“The key message I hear across every sector of the U.S. economy is that a modernized NAFTA must reduce trade barriers between our three countries and enhance the ability of North America to compete in the rest of the world,” McNaughton told Canadian lawmakers last week.

“Put simply, American business is telling their government that the cardinal rule for NAFTA renegotiation is do no harm,” he said.

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Mexico shopping for new pork suppliers (via National Hog Farmer)

Mexico’s concern over North American Free Trade Agreement renegotiations sparks the country to begin seeking other viable options for pork supplies, reports pork leaders during a press conference held at the World Pork Expo in Des Moines, Iowa, last week.

While Mexico appreciates and values the pork trade relationship with the United States, they too have reservations over the Trump administration’s intentions to revamp NAFTA. “They want to continue the positive relationship that we have with them, but they are very concerned,” says Maria Zieba, National Pork Producers Council deputy director of international affairs.

Last year, 26% of U.S. pork and pork variety meat was exported with the largest volume shipped (730,000 metric tons) to Mexico, accounting for 90% of the pork imported into the country. U.S. exports to Mexico are coming off a fifth consecutive volume record in 2016

During March, the National Pork Board trade team traveled to Mexico City, building trade relations and pursuing new trade opportunities. The delegation invested its time immersing itself in Mexico, which is one of America’s most important export markets. Zieba and other NPPC staff accompanied the NPB members and staff on the trip.

“Our visit to Mexico was eye-opening. As board members, we were able to witness why Mexico is such an important trading partner,” says Jan Archer, NPB immediate past president and a North Carolina pig farmer. “The average Mexican family spends 30% to 40% of its income on food, so they appreciate the ability to access safe, nutritious and affordable U.S. pork.”

If the United States withdraws from NAFTA, Mexico is likely to place a 20% duty on pork. The fear of imposing a 20% duty on various products sent Mexico researching other potential suppliers of pork. “The biggest worry for us and what we heard is they are looking at other markets. They are looking at diversifying where they purchase their pork from,” stresses Zieba.

Global pork trade is extremely competitive. Other leading pork-producing countries are eager to step up and supply Mexico with pork. As U.S. exports to Mexico comes off a fifth consecutive volume record in 2016, the U.S. pork producers understand the economic impact of trade with its No. 1 volume customer.

America’s pig farmers export pork to more than 100 countries worldwide. However, the United States ships more pork to the 20 countries with free trade agreements than all other countries combined. Market access through free trade agreements is essential to selling additional pork.

John Weber, NPPC immediate past president and Iowa pork producer, says while gaining new market opportunities is a leading offense priority, its top defensive priority is NAFTA. “We want to protect pork exports to two of our biggest markets – Canada and Mexico,” explains Weber.

The United States withdrawing from NAFTA would be devastating to U.S. pork producers. Iowa State University economist Dermot Hayes calculates that if Mexico places a 20% duty on U.S. pork, the industry eventually will lose the entire Mexican market. Consequently, this would result in a 5% loss in pork production, 10% reduction in the live hog market which will ultimately cost America’s pig farmer $14 per pig or an aggregated loss of nearly $1.7 billion to the U.S. pork industry alone.

“We are asking the Trump administration to ‘do no harm’ to agriculture when renegotiating NAFTA,” stresses Weber. “For our industry, that means maintaining zero tariff rates on North American trade.”

Pork leaders recognize that NAFTA is not a perfect agreement for all sectors of the U.S. economy. NPPC supports the modernization of NAFTA. However, the organization firmly asks for no tweaks to NAFTA when it comes to pork trade.