Prospect of NAFTA rewrite gives US farmers a case of jitters
PAUL WISEMAN
THE ASSOCIATED PRESS
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 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 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.