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Seasonality provision an issue in NAFTA talks

With seven negotiating rounds under our belt, the fresh produce industry remains as committed as ever to the successful conclusion of a modernized North American Free Trade Agreement (NAFTA). While many challenges and difficult discussions remain, we remain optimistic that NAFTA 2.0 will be a win-win-win agreement for all three NAFTA nations.

However, many may be asking why be optimistic when the political rhetoric coming out of Washington is anything but? Despite tweets and sound bites, real progress is being made at the negotiating table. As of the conclusion of Round 7 in Mexico City in March, a total of 6 chapters have been closed including the Sanitary and Phytosanitary Chapter, Competition Chapter and the Anti-Corruption Chapter. While these 6 chapters only represent a fifth of the total chapters being negotiated, significant progress has been made on others with negotiators also working intersessionally to make advances ahead of the formal negotiating rounds.

While issues like supply management and auto rules of origin remain thorny issues to discuss, one proposal in particular stands to jeopardize the greenhouse industry: the seasonality provision. This provision would allow for countries to impose anti-dumping and countervailing duties on perishable products using only one season’s worth of data and a request from a small regional group representing a commodity. This proposal has the potential to create a tit-for-tat trade war that would undoubtedly impact the entire fresh produce industry supply chain and eventually the consumer.

The seasonality provision remains the number one agricultural issue for the Mexican government and the Mexican Senate has identified it as one of their 6 red lines for the negotiations – and for good reason. Under the current proposal, the greenhouse industry representation from a state would be able to ask for duties on Canadian greenhouse products using only one season’s worth of data. Theoretically, as a retaliatory measure, non-greenhouse producers from the West Coast of Canada producing a certain tree fruit could ask for a duty on a very lucrative product being shipped out of the US, for example from the Pacific Northwest, using the same measures. This is an indication of how quickly this proposal could drive up prices and disrupt the supply chain in a series of moves and counter-moves by NAFTA countries.

As an association representing the entire fresh produce supply chain, we are working closely with Canadian negotiators, Mexican government officials and US industry to remove this “poison pill” from the NAFTA discussions. It is important to note that this proposal is unpopular even in the US. In fact, the Fruit and Vegetable Agricultural Trade Advisory Committee, which reports to the Secretary of Agriculture and US Trade Representative, were reported to have voted 12-3 in favour of removing the provision from the US negotiating proposals.

Despite some specific issues of contention, the agricultural sector across the continent is united in wanting a NAFTA 2.0 that is fair, balanced and reciprocal. The industry will remain fully engaged in these negotiations as long as the parties continue to meet. This is a once-in-a-generation opportunity to modernize NAFTA and ensure that it benefits the greenhouse industry for years to come.

About the Canadian Produce Marketing Association (CPMA):

Based in Ottawa, Ontario, CPMA is a not-for-profit organization that represents a diverse membership made of up of every segment of the produce industry supply chain who are responsible for 90% of the fresh fruit and vegetable sales in Canada. CPMA is fortunate to represent a sector that is both a significant economic driver for communities and that also improves the health and productivity of Canadians.