President announces trade agreement with Mexico; Kansas leaders optimistic

Published: Aug. 27, 2018 at 7:19 PM CDT
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Kansas leaders are pleased with the President's announcement of a new trade agreement agreement with Mexico, though some are being cautiously optimistic as they await final wording.

For his part, President Trump called it a trade "understanding" with Mexico that could lead to an overhaul of the North American Free Trade Agreement, and also said he wants to get rid of the name "NAFTA."

"They used to call it NAFTA," Mr. Trump said in the Oval Office. "We're going to call it the United States-Mexico Trade Agreement. We'll get rid of the name NAFTA. It has a bad connotation because the United States was treated very very badly for NAFTA."

Sen. Pat Roberts, R-Kansas, who chairs the Senate Agricultural Committee, says he is looking forward to learning details of the deal.

"The value of U.S. agricultural exports to Mexico has increased by 305 percent since NAFTA entered into force; farmers and ranchers need to be able to rely on that important market," he said.

Rep. Roger Marshall, R-Kansas, applauded the agreement, saying he believes it meets the demands of the current global economy.

"The days of taking advantage of our American businesses and producers are over, " Marshall said. "(O)ur farmers need certainty, and solidifying this deal with our Mexican markets is a crucial piece to the puzzle. With this agreement, Kansas producers will be treated more fairly as it explicitly reduces trade-distorting policies on agricultural goods and promotes complete transparency between the US and Mexico."

It's unclear yet if Canada will be a part of any revised agreement — Mr. Trump said "we'll see" if Canada can be a part of the deal with Mexico, or if the U.S. and Canada will need a separate deal. Mr. Trump threatened tariffs on cars if Canada doesn't come to an agreement.

"We're starting negotiations with Canada pretty much immediately," Mr. Trump said, adding he will be speaking with Canadian Prime Minister Justin Trudeau "in a little while."

The president would need Congress' approval for any new trade agreement.

Gov. Jeff Colyer, R-Kansas, said the new agreement alleviates concerns that Kansas producers could face another market with added costs.

“Kansas is heavily dependent on the agricultural and manufacturing industries and it is a huge relief to our state to know that we can continue trading tariff-free with the new agreement,” Colyer said.

Coupled with word of the Mexico agreement came an announcement Monday for up to $12 billion in assistance to farmers impacted by tariffs. Members of the Kansas delegation welcomed the news, but questioned whether it is enough.

“(W)ith low prices across the board, our farmers need long-term certainty. They want the predictability of export markets over aid," Roberts said.

Sen. Jerry Moran, R-Kansas, who sits on the Senate Appropriations Subcommittee on Agriculture, was more forceful.

"I remain concerned that no disaster package will be enough to cover the long-term costs of lost export markets," Moran said. “The aid also does not address the many other Kansas manufacturers and small businesses that have been harmed by the tariffs. Kansas farmers and ranchers, as well as manufacturers, would be best served by resolving trade disputes that have driven down commodity prices, while aggressively pursuing new markets to sell the food and fiber we produce.

Mr. Trump, surrounded by reporters, made the announcement of the trade understanding by inviting Mexican President Enrique Peña Nieto on the phone, although the phone call placed on speaker was plagued with technical difficulties.

"I thought we would congratulate each other before it got out, and I know we will have a formal news conference in the not-too-distant future," Mr. Trump told Nieto.

Mexico is holding a news conference Monday afternoon on what it describes as trade agreement principles reached on "NAFTA."

Nieto tweeted just before Mr. Trump's announcement that he spoke to Trudeau about the status of NAFTA negotiations and progress the U.S. and Mexico have made, and expressed the importance of Canada's involvement in the negotiations.

Canada pointed out that its signature is required on any new deal.

"Canada is encouraged by the continued optimism shown by our negotiating partners," said Adam Austen, spokesperson for Chrystia Freeland, Canada's minister of foreign affairs. "Progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement. We are in regular contact with our negotiating partners, and we will continue to work toward a modernized NAFTA. We will only sign a new NAFTA that is good for Canada and good for the middle class. Canada's signature is required."

In May, Canada rejected a proposal Mr. Trump wanted to add to the NAFTA renegotiations, a five-year sunset clause. At the time, Trudeau personally offered to come to the U.S. to work out the details of a revised trade deal, but Vice President Mike Pence called him just before his visit to say that the visit would only take place if Trudeau accepted the sunset clause. Trudeau refused and the visit was canceled. Neither President Trump nor Pena Nieto mentioned the sunset clause during their announcement.

Mr. Trump has derided NAFTA as the worst trade deal ever signed. But it's taken more than 18 months in office to reach any sort of agreement.

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