NAFTA Should Protect Common Food Names, Omit COOL and Build Off TPP SPS Language, Industry Tells Lawmakers

Ongoing Mexico-EU free trade agreement discussions present the possibility that Mexican use of geographical indications (GI) will be restricted, after the recently concluded EU-Canada free trade agreement codified rules prohibiting future facilities from associating with certain cheese names, U.S. Dairy Export Council CEO and former U.S. agriculture secretary Tom Vilsack said during a House Agriculture Committee hearing on NAFTA. “What we’re concerned about is which negotiation gets completed first: The modernization of NAFTA that could potentially reinsert the GI protections that were in the [Trans-Pacific Partnership] agreement, or will Europe do what they recently did with Japan, and enter into a free trade agreement that basically restricts the Mexican use of GIs?” he said. This critical issue should encourage NAFTA talks to proceed “without delay,” Vilsack said.

“We don’t want to give the EU another notch, if you will, in that effort to preserve and protect common names and create a due process system.” Among other things, the TPP contained language that would have allowed third countries to provide input on the process of applying GIs to products, which National Milk Producers Federation CEO Jim Mulhern last year said would promote transparency and access of U.S. cheese into other markets (see 1603030035).

TPP also provided a sound basis for sanitary/phytosanitary standards, National Oilseed Processors Association (NOPA) President Thomas Hammer indicated in written testimony. Among other things, TPP directed member countries to take into account standards, guidelines and recommendations on risk analyses developed by international organizations, as well as requirements to boost transparency in analyses to avoid unnecessary delays (see 1706150035). NAFTA’s SPS provisions should adopt tighter standards and deadlines for adverse import checks; increased reporting, recordkeeping, and transparency; “trade facilitative” residue levels; and “low level” tolerance principles, Hammer’s testimony says. Further, negotiators should enhance NAFTA’s SPS enforcement mechanisms, including through potential compensation, a “three strikes policy” or retroactive damages to hold parties accountable for any “persistent and unscientific” SPS measures, the prepared remarks indicate.

The biggest NAFTA concern for the U.S. beef industry -- which current exports its products to Canada and Mexico with zero tariffs -- is the specter of COOL’s return, National Cattlemen’s Beef Association CEO Kendal Frazier said. He mentioned that Canada and Mexico are still authorized by the World Trade Organization to retaliate (see 1512070017), should the U.S. reimpose previous measures applying to muscle cuts of meat, which were issued in a May 2013 Agricultural Marketing Service final rule (see 13052317). The Consumer Federation of America earlier this month announced its preference for inclusion of COOL regulations in NAFTA (see 1707180022).

NOPA is concerned about the potential removal of NAFTA Chapter 19 binational dispute settlement and Chapter 11 investor-state dispute settlement processes, Hammer said. Chapter 19 is an “insurance policy” against unfair antidumping or countervailing duty practices of other parties, he said. Meanwhile, there have been indications that Canada and Mexico are employing unfair dispute practices, and a dispute settlement practice to ensure fair competition should be protected, Hammer said. Rep. Rich Allen, R-Ga., said he supports the Trump administration’s stated objective to negotiate the removal of Chapter 19, in line with his constituents (see 1707180022). He said it is important to recognize the agricultural successes and challenges of the agreement.

Florida Tomato Growers Exchange Executive Vice President Reggie Brown called for reworking U.S. trade laws to expand opportunities for perishable and seasonal specialty crop producers to petition for AD and CV duties, noting that the U.S. is competing with Mexican specialty crops sold at very low prices. He noted that U.S. trade laws dictate that U.S. producers have 51 percent of like product to the ones being allegedly dumped in order to petition for AD duties, handicapping seasonal, perishable producers from filing petitions. Florida and California strawberry producers compete with Mexican strawberries, especially when domestic production falls yearly from December to March, as Mexican strawberries flood the U.S. at low prices, Brown said. “We’re not saying close the border,” he said. “We’re just saying if you’re dumping stuff in this market at less than the cost of growing it, that’s not a fair trade practice. And without that modification, those pieces of American agriculture are going to be ground up.”