Prospect of NAFTA re­write gives US farm­ers a case of jit­ters

Kingston Whig-Standard - - BUSINESS - PAUL WISE­MAN

WASH­ING­TON — A siz­able ma­jor­ity of ru­ral Amer­i­cans backed Don­ald Trump’s pres­i­den­tial bid, drawn to his calls to slash en­vi­ron­men­tal rules, strengthen law en­force­ment and re­place the fed­eral health care law.

But many farm­ers are ner­vous about an­other plank in Trump’s agenda: His vow to over­haul U.S. trade pol­icy, in­clud­ing his in­tent an­nounced Thurs­day to rene­go­ti­ate the North Amer­i­can Free Trade Agree­ment with Canada and Mex­ico.

Trump’s mes­sage that NAFTA was a job-killing dis­as­ter had never res­onated much in ru­ral Amer­ica. NAFTA had widened ac­cess to Mex­i­can and Cana­dian mar­kets, boost­ing U.S. farm ex­ports and ben­e­fit­ing many farm­ers.

Farm Coun­try went on red alert last month when it looked as if Trump wasn’t even go­ing to pur­sue a NAFTA re­write: White House aides had spread the word that the pres­i­dent would sim­ply with­draw from the pact.

“Mr. Pres­i­dent, Amer­ica’s corn farm­ers helped elect you,” Wes­ley Spur­lock of the Na­tional Corn Grow­ers As­so­ci­a­tion warned in a state­ment. “With­draw­ing from NAFTA would be dis­as­trous for Amer­i­can agri­cul­ture.”

Within hours, Trump soft­ened his stance. He wouldn’t ac­tu­ally dump NAFTA, he said. He’d first try to forge a more ad­van­ta­geous deal with Mex­ico and Canada — a move that for­mally be­gan Thurs­day when his top trade ne­go­tia­tor, Robert Lighthizer, in­formed Congress of the ad­min­is­tra­tion’s in­tent to rene­go­ti­ate NAFTA.

As a can­di­date, Trump de­fined his “Amer­ica First” stance as a means to fight un­fair for­eign com­pe­ti­tion. He blamed un­just deals for swelling U.S. trade gaps and steal­ing fac­tory jobs.

But NAFTA and other deals have been good for Amer­i­can farm­ers, who stand to lose if Trump ditches the pact or ig­nites a trade war. The United States has en­joyed a trade sur­plus in farm prod­ucts since at least 1967, gov­ern­ment data show. Last year, farm ex­ports ex­ceeded im­ports by $20.5 bil­lion.

“You don’t start off trade ne­go­ti­a­tions ... by pick­ing fights with your trade part­ners that are com­pletely un­nec­es­sary,” says Aaron Lehman, a fifth-gen­er­a­tion Iowa farmer who pro­duces corn, soy­beans, oats and hay.

Many farm­ers worry that Trump’s poli­cies will jeop­ar­dize their ex­ports just as they face weaker crop and live­stock prices.

“It comes up pretty quickly in con­ver­sa­tion,” says Blake Hurst, a corn and soy­bean farmer in north­west­ern Mis­souri’s Atchi­son County.

That county’s vot­ers backed Trump more than 3-to-1 in the elec­tion but now feel “it would be bet­ter if the rhetoric (on trade) was a lit­tle less stri­dent,” says Hurst, pres­i­dent of the Mis­souri Farm Bu­reau.

Trump’s main ar­gu­ment against NAFTA and other pacts was that they ex­posed Amer­i­can work­ers to un­equal com­pe­ti­tion with lowwage work­ers in coun­tries like Mex­ico and China.

NAFTA did lead some Amer­i­can man­u­fac­tur­ers to move fac­to­ries and jobs to Mex­ico. But since it took ef­fect in 1994 and eased tar­iffs, an­nual farm ex­ports to Mex­ico have jumped nearly five-fold to about US$18 bil­lion. Mex­ico is the No. 3 mar­ket for U.S. agri­cul­ture, no­tably corn, soy­beans and pork.

“The trade agree­ments that we’ve had have been very ben­e­fi­cial,” says Stephen Cen­sky, CEO of the Amer­i­can Soy­bean As­so­ci­a­tion. “We need to take care not to blow the sig­nif­i­cant gains that agri­cul­ture has won.”

The U.S. has run a sur­plus in farm trade with Mex­ico for 20 of the 23 years since NAFTA took ef­fect. Still, the sur­pluses with Mex­ico be­came deficits in 2015 and 2016 as global live­stock and grain prices plum­meted and shrank the value of Amer­i­can ex­ports, notes Joseph Glauber of the In­ter­na­tional Food Pol­icy Re­search In­sti­tute.

Mex­ico has be­gun to seek al­ter­na­tives to U.S. food be­cause, as its agri­cul­ture sec­re­tary, Jose Calzada Rovi­rosa, said in March, Trump’s re­marks on trade “have in­jected un­cer­tainty” into the agri­cul­ture busi­ness.

Once word had sur­faced that Trump was con­sid­er­ing pulling out of NAFTA, Sonny Per­due, two days into his job as the pres­i­dent’s agri­cul­ture sec­re­tary, has­tened to the White House with a map show­ing ar­eas that would be hurt most by a pullout, over­lapped with many that voted for Trump.

“I tried to demon­strate to him that in the agri­cul­tural mar­ket, some­times words like ‘with­draw’ or ‘ter­mi­nate’ can have a ma­jor im­pact on mar­kets,” Per­due said in an in­ter­view with The Associated Press. “I think the pres­i­dent made a very wise de­ci­sion for the ben­e­fit of many agri­cul­tural pro­duc­ers across the coun­try” by choos­ing to re­main in NAFTA.

Trump de­liv­ered an­other disappointment for U.S. farm groups in Jan­uary by ful­fill­ing a pledge to aban­don the Trans-Pa­cific Part­ner­ship, which the Obama ad­min­is­tra­tion ne­go­ti­ated with 11 Asia-Pa­cific coun­tries. Trump ar­gued that the pact would cost Amer­i­cans jobs by pit­ting them against low-wage Asian labour.

NATI HARNIK/AP PHOTO

Blake Hurst, a corn and soy­bean farmer and pres­i­dent of the Mis­souri Farm Bu­reau, leans against a truck on his farm in West­boro, Mo. U.S. Pres­i­dent Don­ald Trump has vowed to redo the North Amer­i­can Free Trade Agree­ment, but Hurst says NAFTA has been good for his busi­ness.

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