Case of the jitters
Prospect of NAFTA rewrite gives U.S. farmers pause
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 fifthgeneration 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 low-wage 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 $18 billion. Mexico is the No. 3 market for U.S. agriculture, notably corn, soybeans and pork.
Trump delivered another disappointment for U.S. farm groups in January by fulfilling a pledge to abandon the TransPacific Partnership, which the Obama administration negotiated with 11 Asia-Pacific countries. Trump argued that the pact would cost Americans jobs by pitting them against lowwage Asian labour.
But the deal would have given U.S. farmers broader access to Japan’s notoriously impregnable market and easier entry into fast-growing Vietnam.
Many farmers are still hopeful about the Trump administration. Some, for example, applaud his plans to slash environmental rules that they say inflate the cost of running a farm. Some also hold out hope that the author of “The Art of the Deal” will negotiate ways to improve NAFTA.
One such way might involve Canada. NAFTA let Canada shield its dairy farmers from foreign competition behind tariffs and regulations but left at least one exception - an American ultra-filtered milk used in cheese. When Canadian farmers complained about the cheaper imports, Canada changed its policy and effectively priced ultra-filtered American milk out of the market.