Last week at the National Cattleman’s Beef Association meeting in Nashville, I attended NCBA’s annual International Trade Committee meeting. With the all of the stir created by President Trump on NAFTA and TPP, the committee meeting on Friday afternoon could not have been more timely. One of the speakers was international trade lawyer Gary Horlick. His address to a room packed with beef producers was absolutely fascinating.
Everyday we are fed a lot of information — some of it fact, some speculation and some is pure BS. I have my own theories on many topics, but as I try to formulate an opinion I listen and ask questions of the smart people — individuals who have an inside context to formulate an opinion based on their experience and knowledge of a topic. On trade, Gary Horlick is the smart guy in the room.
Horlick is one of the highest-ranked international trade lawyers in the world and has worked in senior positions in the U.S. Congress and the Executive Branch, where he was responsible for all U.S. antidumping and countervailing duty cases, Foreign Trade Zones, Special Import Programs, and the negotiation of the U.S.-EU Steel Agreement.
Horlick discussed several trade files at the NCBA trade meeting. Here are my in-person notes on what he said:
- We (Horlick referring to the United States) have a really positive relationship with Mexico. The NAFTA described during the election is not reality.
- There are many parts to NAFTA. The cattle industry will have to decide what they want changed to create a “better deal”.
- Commerce secretary nominee Wilbur Ross will be in charge of all of the renegotiation, but he has very limited knowledge of agriculture.
- Some of the people that do not like NAFTA, they do not want panels to rule over the U.S. in dispute resolution, but they forget those same panels can also rule in the U.S.’ favour.
- Negotiating a bilateral with Japan will not be easy. In TPP, the U.S. didn’t give Japan much. Japan’s gains came from other countries that would not be involved in a bilateral deal between Japan and the U.S.
China and rest of Asia
- China agreed to accept US beef last year. Agriculture is caught in the middle of the Peter Navarro vs China crossfire.
- Not to scare all of you more but…Korea agreement could be under fire as well.
- Another speaker at the meeting, Brett Stuart of Global AgriTrends noted there is no other China, China is the opportunity. “We are like a co-dependent divorced couple.” This relationship is complicated due to things like China stealing 6 billion USD per year through intellectual property infringement.
Europe and TTIP
- Work on this agreement is frozen and going nowhere at the moment. The U.K. and U.S. seem keen to do a fast deal that would be good political public relations for both sides, although some of the issues are the same with a U.K. agreement as TTIP.
The Proposed Border Tax
- Border adjustment tax means changing 10X more than usual. This is not a simple resolution. The rest of the world is not going to sit there and let us just do this. They will not like it and retaliation will put a bullseye on agriculture.
To sum it up, as a Canadian sitting in on an American trade meeting, I thought Horlick had balance and some sobering thoughts for the cattle people in the audience. As all countries search for a “better deal” in this time of trade pandemonium, agriculture waits to see it’s fate. Outside of protected sectors like dairy and sugar, NAFTA has been very friendly to agriculture. In any negotiation there are concessions. Whether in the Canadian, U.S. or Mexican camps, the concern is that agriculture is used as a concession and loses in the end.