World Grain - June 2017 - 10

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Trump administration to launch
NAFTA renegotiation
WASHINGTON, D.C., U.S. - U.S. President Donald Trump
intends to initiate negotiations with Canada and Mexico regarding
modernization of the North American Free Trade Agreement
(NAFTA), according to a May 18 letter submitted to the U.S. Senate
by U.S. Trade Representative Robert E. Lighthizer.
"We will consult closely with Congress in developing our
negotiating positions to ensure that they are consistent with
congressional priorities and objectives outlined in section 102 of
the Trade Priorities and Accountability Act," Lighthizer wrote in the
letter. "We intend to initiate negotiations with Canada and Mexico
as soon as practicable, but no earlier than 90 days from the date of
this notice."
NAFTA is a multi-layer free trade agreement between the United
States, Canada and Mexico that came into effect in 1994. It was
designed to remove tariff barriers and facilitate the cross-border
movement of goods and services among the three countries. There
has been controversy over the effectiveness of the agreement in
ongoing discussions of potential renegotiations.
Following the release of Lighthizer's letter to the Senate, U.S.
Secretary of Agriculture George (Sonny) Perdue issued a statement
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a better deal for many parties.
"While NAFTA has been an overall positive for American
agriculture, any trade deal can always be improved," Perdue said. "As
President Trump moves forward with renegotiating with Canada and
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ranchers, foresters and producers. When the rules are fair and the
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It's why we recently announced the creation of an undersecretary
for trade at USDA, because as world markets expand, we will be an
unapologetic advocate for American agriculture. As I have often said,

if our people continue to grow it, USDA will be there to sell it."
Many U.S. ag groups welcome the idea or opportunity to
renegotiate NAFTA but urge a tremendous amount of caution on
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in the industry.
"NAFTA is the most critical free trade agreement on the books
for U.S. grain farmers, providing open access to countries that are
among our top corn, sorghum and barley export markets as well as
VLJQL¿FDQWDQGJURZLQJPDUNHWVIRUGLVWLOOHU¶VGULHGJUDLQVZLWKVROXbles (DDGS) and meat products made using grain," said Chip Councell, chairman of the U.S. Grains Council (USGC). "This agreement
has served our industry extremely well over the past 20 years, allowing us and our customers there to integrate operations and build deep
relationships that both sides value. Our top priority in the modernization of NAFTA is to maintain this market access and keep in place
what we and our customers have built."
Councell explained that currently all corn products that go into
Mexico and Canada are duty-free, which creates about $2.7 billion
in commodity corn alone.
"That demand is an essential part of ensuring farmers can continue
to farm in this economy," he said.
Some groups suggested focusing on updating certain areas of the
agreement instead of re-creating it. U.S. Wheat Associates (USW)
and the National Association of Wheat Growers (NAWG) said a
good place to start are the sanitary and phytosanitary (SPS) rules
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Partnership (TPP) negotiations.
"Despite the risks, there's an opportunity here to get better trade
rules in place that will set the gold standard for trade agreements
going forward, without hurting wheat farmers and their importing
customers," said David Schemm, president of NAWG.

Grains boost Olam quarterly earnings
SINGAPORE - Olam International's profit after tax and
minority interests (PATMI) for the first quarter ended March 31
was S$143.9 million ($102.89 million), up 26% from S$113.6
million compared to the same period of last year. Revenue for
the quarter was S$5.804 billion, up 21.9% from S$4.761 billion in
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up 50% from 2.965 million tonnes in the same period of last year.
Olam attributed the uptick in sales largely to "opportunistic trading
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"We are pleased to have started the year with a strong set of
results despite continued global uncertainty," said Sunny Verghese,
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our priority clusters, while constantly rebalancing our portfolio to
10

ensure a good mix of gestating and contributing assets. We remain
focused on continuing to deliver long-term, sustainable value for our
shareholders."
Olam's Food Staples & Packaged Foods earnings before interest,
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of 2016. Revenue increased to S$1.975 billion from S$1.201 billion.
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tonnes, up from 1.792 million tonnes in the same period as last year.
Grains were a key growth driver in the segment as its origination
and trading business, as well as its wheat milling operations in West
Africa, continued to perform well, the company said.
Construction continued in Nigeria on the animal feed mills and
hatchery as well as the wheat milling capacity expansion in Ghana.
June 2017 / World Grain / www.World-Grain.com

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World Grain - June 2017

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