NEW YORK (Reuters) - The worst case outcome for ongoing negotiations between the United States, Canada and Mexico to re-work the North American Free Trade Agreement is that the trade pact is “torn up,” Cargill Chief Executive David MacLennan said on Wednesday.
About 10 percent of the company’s revenues are related to NAFTA, MacLennan, the head of the global commodities trader, said on the sidelines of the Bloomberg Global Business Forum in New York.
“We’re tracking them very closely,” MacLennan said of the negotiations, which enter their third round next week. “A significant portion of our corn sweetener business is NAFTA-related.”
MacLennan said that the pact has provided “significant benefits” to agriculture but added that improvements could be made to the 23-year-old deal.
Agribusinesses like Cargill and rivals Archer Daniels Midland Co, Bunge Ltd and Louis Dreyfus Co, known collectively as the ABCDs of global grain trading, capitalize on moving commodities from areas of surplus to areas of deficit.
Plentiful global supplies of grains following massive harvests have limited those opportunities for Minnesota-based Cargill and its rivals. MacLennan added that he sees no change in the grain surplus situation this year.
Reporting by Astha Rajvanshi and Melissa Fares; Writing by Mark Weinraub; Editing by Chizu Nomiyama and Nick Zieminski