CEDAR RAPIDS — Despite warnings from Canada that the future of NAFTA is in jeopardy unless the Trump administration backs off its most controversial proposals, Sen. Chuck Grassley remains optimistic negotiations will preserve the trade pact critical to Iowa export markets.
Grassley, who has some concerns about the impact of changes in NAFTA being negotiated with Mexico and Canada, has been making the case for continuing the trilateral agreement which, according to the U.S. Chamber of Commerce, supports 138,000 Iowa jobs and $5.6 billion in exports.
The Iowa Republican expects the Trump administration will continue its hard line approach to negotiations, “but they surely are not going to let this fall through,” he said while in Cedar Rapids earlier this week.
Grassley said he, Sen. Joni Ernst and Senate Agriculture Committee Chairman Pat Roberts of Kansas have been making the case for continuing NAFTA with Trump advisers for several months. He’s had three or four meetings with trade adviser Peter Navarro, two or three with Commerce Secretary Wilbur Ross and within the past two weeks U.S. Trade Representative Robert Lighthizer was in his office for 45 minutes.
“And that’s all we talked about,” he said about the future of NAFTA.
Among the most onerous proposals, according to Canada trade officials, is Lighthizer’s insistence on imposing a sunset clause on NAFTA, killing the pact’s dispute panels and dismantling Canada’s dairy sector, which relies on a system of quotas and tariffs that Canadian officials argue prevents oversupply.
Iowa ag producers have a lot at stake, Grassley said, because Mexico is the No. 1 importer of Iowa corn. Without NAFTA, Mexican tariffs on high fructose corn syrup would increase 75 percent, the Chamber said. Tariffs could increase as much as 10 percent on pork imports, 25 percent on beef and 75 percent on chicken.
About 47 percent of Iowa’s exports are destined for customers in Mexico and Canada. Tariff increases there would make Iowa-made products less competitive, the Chamber said.
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Grassley supports Trump’s efforts to negotiate a better deal for U.S. manufacturing, “but I just don’t want agriculture screwed up in the process.”
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