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USGC: Tweaking NAFTA risky for grains

The U.S. Grains Council says there is a risk in tweaking the North American Free Trade Agreement for U.S. grains.

Floyd Gaibler told the House Agriculture Committee Wednesday that NAFTA is critical to the U.S. grains business because it’s been efficient, effective and tariff free.

But, he says Mexico has confirmed to the Grains Council that it is looking for other supplies because of political tensions with the U.S. and the council has strong but unconfirmed evidence that Mexico will be buying corn from South America in August and September.

“Given the political uncertainty, our customers have told us that rather than continue taking future positons for grain purchases, they could resort to more volatile and risky spot markets,” said Gaibler, in testimony Wednesday.

Gaibler says the discussion about NAFTA has caused uncertainty in the market that needs to be resolved as quickly as possible.

“This angst is translated into actual impacts with U.S. corn exports down 7 percent since the first of the year,” said Gaibler.

The Grains Council hopes agriculture doesn’t get caught up as a retaliation target, Gaibler told lawmakers. He says NAFTA renegotiation should build on the important provisions that were in the Trans Pacific Partnership.

NAFTA renegotiations are set to begin August 16^th.