Agriculture Sows Support for NAFTA

By Sean Hackbarth, U.S. Chamber of Commerce

NAFTA continues to be top of mind as the latest round of negotiations on modernizing the trade agreement concluded late last month.

Knowing the harm it would have on American agriculture, elected officials and advocacy groups are making the case to President Trump not to withdraw from NAFTA.

At a lunch with the president on Tuesday, Sen. Joni Ernst defended the 23-year-old trade agreement:

“Today, I stressed to (them) the importance of maintaining NAFTA and the duty-free access our (agriculture) products enjoy under it,” Ernst said in a statement later.

“Trade plays a critical role in Iowa’s economy and I reiterated to the administration the importance of ensuring Iowans remain competitive in the global market — provided our trading partners are operating on a level playing field.

“I will continue working to ensure that any changes made to NAFTA do not hurt our crop and livestock producers.”

Sen. Pat Roberts (R-KS), chairman of the Agriculture Committee, took to The Hill to point out what NAFTA means for farmers, ranchers, and the agricultural industry:

The facts speak for themselves, especially for my home state of Kansas. In 2016 alone, Kansas exported more than $300 million agriculture goods to our northern neighbor. Since NAFTA entered into force on Jan. 1, 1994, the value of U.S. agricultural exports to Canada has increased by 265 percent and to Mexico by 289 percent.

[Last month, Sens. Roberts and Ted Cruz (R-TX) spoke at the U.S. Chamber on the opportunities for modernizing NAFTA.]

At the same time Senators pitched President Trump, agricultural groups and their supporters showed support for NAFTA on social media.

But nothing is quite like hearing from people who know first-hand what NAFTA means to their livelihoods. We published two of these voices recently on Above the Fold.

Montana wheat farmer, Gordon Stoner:

NAFTA is one of our most important trade agreements. Just last year alone, Mexico was our largest export market with about three million metric tons of wheat and is consistently in the top ten. Prior to NAFTA, U.S. wheat was subject to high tariffs and other trade barriers in Mexico. With zero duties and lifted tariffs, exports to Mexico increased by 400% ten years after implementation of NAFTA, compared to ten years prior to NAFTA. 

While we hope calls for withdraw are just rhetoric, we are taking this threat very seriously. In fact, threats alone have already hurt U.S. wheat. When it comes to commodities, if a customer is unsure of the reliability of their source, they will look to our competitors. Mexico has done just that after a trade mission to Argentina and Brazil in May which led to Mexican millers purchasing Argentina wheat. The first shipment purchased by eight companies will be made in late December and will be 30,000 metric tons of wheat as a trial.

Minnesota pork producer, Randy Spronk:

As a hog farmer from Edgerton, Minnesota, I’ve learned over the years that prosperity depends on things I can control, like hard work, and other things no one can. But today, pork producers across rural America are profoundly concerned about a potential man-made disaster: The prospect of losing access to the Mexican and Canadian markets for our products. That’s exactly what would happen if the United States withdraws from the North American Free Trade Agreement (NAFTA).

These concerns about the ravages my operations would face are shared by the overwhelming majority of farmers and ranchers across the United States. While most agree that NAFTA can and should be modernized, the administration has stated that its core objective in the negotiations is to achieve more balanced trade between the United States and Mexico. (Canada appears to be of secondary importance since our trade deficit with our northern neighbor is relatively small.)

However, neither the Mexican nor the Canadian government has said it would be willing to accept the elimination of trade deficits as an objective of the renegotiation. What if they refuse? If they refuse, and the administration carries through with its threat to terminate the entire agreement, it will be a financial catastrophe for all of U.S. agriculture.

More than agriculture will be hurt if NAFTA crumbles. John Murphy has a good piece showing how millions of jobs across a host of industries in just twelve states would be at risk if the U.S. abandons NAFTA.  

Fourteen million Americans have their jobs supported by trade with Canada and Mexico. Modernizing NAFTA is the sensible course to maintain U.S. competitiveness, but abandoning a trade agreement that’s helped farmers, businesses, workers, and families would be disastrous.