By EARL ANTHONY WAYNE
(The following article is an excerpt of an article which originally appeared in the U.S. daily newspaper the “Omaha World-Herald” and is being republished in Pulse News Mexico with specific prior permission.)
Nebraska, like the rest of the U.S. Midlands states, depends mightily on its $2.6 billion in trade with Mexico and Canada. Almost half of Nebraska’s agricultural exports and 91,000 jobs rely on that commerce.
Yet, the slow, contentious renegotiation of the North American Free Trade Agreement (NAFTA) is endangering that trade and the good relations with Canada and Mexico. Unless all three governments show flexibility now, the valuable “modernization” of NAFTA will be delayed until after a new Mexican government takes office in December, pushing final decisions into 2019. That would leave great uncertainty for Nebraska’s farmers, workers and businesses. A total collapse of NAFTA would be extremely costly for Nebraska and for the United States. Negotiators should press for broad agreement on key issues at a minimum by the end of April, before Mexico’s July presidential and congressional elections and the U.S. congressional elections close the political maneuvering space in both countries.
The best outcome would be to conclude an agreement, but that may not be possible, given the detailed work still needed. If the three countries can settle on big-ticket items, however, then technical talks can continue and reduce economic uncertainty.
Ending NAFTA would hit hard the U.S. auto industry and farmers, who sell over $40 billion in annually to our neighbors. Already, Mexico bought up to 900 percent more in agricultural products from Brazil over the last year. Withdrawal from NAFTA could see Mexican tariffs on beef rise from zero to 25 percent, which would badly hurt Nebraska ranchers.
All three parties must show flexibility to achieve breakthroughs. The United States must work constructively around the very hardline positions it has taken on rules of origins for autos, a sunset clause for the agreement, dispute settlement mechanisms and government procurement. Canada and Mexico should be creative in addressing underlying U.S. concerns. Mexico should accept a strong chapter on labor rights. Canada needs to be adaptable on other issues. The United States is trying to gain advantage via steel and aluminum tariffs, but the threatened tariffs also make it harder politically for either neighbor to move.
Much other work remains on less controversial issues. The key is to make as much progress now on the big items to allow work to continue through the political seasons, while promoting economic growth in all three economies.
Nebraskans and other U.S. Midlanders should send a clear message: Now is the time to forge an agreement.
Earl Anthony Wayne is a public policy fellow at the Woodrow Wilson Center and career ambassador (ret) from the U.S. Diplomatic Service, where he served as U.S. ambassador to both Mexico and Argentina, as well as assistant secretary of State for economic and business affairs.