More and more,
lawmakers are weighing in with the administration on the perils of
dumping NAFTA. For example, Bloomberg is reporting this week that the
Senate Finance Committee Republicans warned the administration trade
czar on the “high price for the U.S.” if the administration pulls the
plug on the North American Free Trade Agreement.” Committee
Republicans told USTR Robert Lighthizer that it would be a “paradox of
enormous irony” if Congress passes a pro-growth tax bill and a U.S.
exit from NAFTA causes a farm recession and tanks the stock market,
Senate Agriculture Committee Chairman Pat Roberts, R-Kan., told
Bloomberg. “I think Bob gets that,” Roberts said, adding that Commerce
Secretary Wilbur Ross and others in the administration might have
different ideas. Lighthizer met with Roberts and other Finance
Committee Republicans Dec. 19. USTR spokeswoman Amelia Breinig told
Bloomberg that Lighthizer has had similar sessions with Republicans and
Democrats on the House Ways and Means and Senate Finance committees.
The three NAFTA countries are preparing for a negotiating round in
Montreal Jan. 23-28. The talks have stalled over U.S. demands for a
sunset clause to terminate the pact after five years unless the parties
agree to renew it and a new requirement for 50 percent U.S. content in
automobiles, among other matters. The President has repeatedly
threatened to pull the U.S. out of the pact if he can't secure a better
deal. When asked about a possible contingency plan if the U.S leaves
NAFTA, Roberts said that there is some talk about legislation to use
Commodity Credit Corp. funds to offset the damage to U.S. farmers that a
NAFTA exit would cause. “We could consider that in the farm bill,” he
said, adding that it would be best to prevent the NAFTA pullout from
happening. The Commodity Credit Corp. was established to stabilize,
support, and protect farm income and prices. Roberts said it would be
“pretty difficult” to try to fashion legislation to offset the harm
caused by a NAFTA exit “and get the criterion and the metric to try to
make that work.” The U.S. is losing markets now with Mexico buying
wheat from Argentina, he said. “There's wheat from Kansas that should
be going to Mexico,” Roberts said. “We have wheat on the ground. Our
prices are very low.” When asked if Lighthizer gave any reassurances on
NAFTA, Roberts said: “We were being more specific. He was being more
general.” Roberts said Lighthizer also discussed a sunset clause to
terminate new trade deals after five years. The U.S. has proposed
five-year sunset clause in the NAFTA talks, but Mexico and Canada say
that such a clause would create uncertainty in business relationships.
Roberts said he didn't think anyone would sign on to that approach. A
spokeswoman for Senate Finance Committee Chairman Orrin Hatch R-Utah,
told Bloomberg that Hatch continues to believe terminating or weakening
NAFTA would be detrimental to the U.S. and Utah's economy, although
Hatch supports “modernizing” the pact, she said without providing more
detail. Bloomberg commented that the meeting with Lighthizer came as
Republican lawmakers are “upping engagement” with the administration to
try to prevent the U.S. from withdrawing from NAFTA. Also, Iowa
Governor Kim Reynolds told a recent news conference that Iowa's farmers
would fight for NAFTA. She traveled to Washington, along with three
other farm-state governors, to meet with Lighthizer and Ross on NAFTA
and said she told them, “if you think they're going to stand down and
just let this be a negotiating tactic, they're not. You're going to
hear from me and you're going to hear from Iowa farmers about the
impact that this would have on the ag economy not only in Iowa but in
the Midwest and across this country,” she said. Ag committee chair
Roberts and others across agriculture no doubt have clear memories of
how unsuccessful Carter administration policies were in their efforts
to offset impacts of the embargo of grain and meat shipments to the
Soviet Union in 1980. While the programs used were substantial, the
political impact of the market interruption was a political catastrophe
for that administration—a fact that Governor Reynolds and Senator
Roberts and many others can be expected to remind officials repeatedly
as the trade talks continue, Washington Insider believes.
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