OTTAWA, Oct.11 (Xinhua) -- As Canadian, American and Mexican negotiators began the fourth round of talks to revise the North American Free Trade Agreement (NAFTA) near Washington D.C. Wednesday, a Canadian trade expert believes agriculture could keep the negotiations from collapsing.
"Agricultural trade pretty much doubled under NAFTA, and there is a large swath of agricultural interests that want to make sure that stays open," said Carlo Dade, director of the trade and investment center at the Canada West Foundation.
He explained that the American agricultural industry persuaded Donald Trump not to withdraw the U.S. from its five-year-old free trade agreement with South Korea. But if NAFTA is terminated, as Trump has threatened, U.S. access to foreign markets could be further imperiled.x Should the Trans-Pacific Partnership (TPP) proceed without the U.S. after Trump pulled his country out of the now 11-country agreement, Canada and Mexico, which signed onto the pact, could benefit, according to Dade.
"Withdrawing from the TPP will cost the U.S. billions of dollars, and that's money that's coming to Canada for beef, fruits and vegetables, and timber exports," Dade told Xinhua in an interview.
He explained that Mexico is already preparing a back-up plan if NAFTA "goes sideways." The Mexican government is exploring other markets beyond the U.S. to purchase corn, which is now imported mostly from the U.S.
If the TPP is ratified, Mexico could rely on other imports from its pact partners, such as New Zealand or Canada - for dairy products, said Dade.
Canada's supply-management system for dairy, eggs and poultry, which is subject to tariffs as high as 270 percent for dairy products to protect Canadian producers, has been a trade irritant between Canada and the U.S., and Trump has already called it "unfair" to American dairy farmers.
But supply management could be an important bargaining chip for Canada in the NAFTA talks, according to Dade.
"If we agree to grant access for more American dairy products to Canada, that's a win the U.S. administration needs," he explained.
"In exchange, Canada could ask for regulatory harmonization on food processing and food inspection to reduce the chance the U.S. can target a specific Canadian agricultural sector. The American agricultural industry would like that too because it would ensure that Canada wouldn't target it either."