New Canada pact could help businesses, dairy farms
WASHINGTON — Connecticut manufacturers, dairy farmers and financial service companies could benefit to varying degrees from the new trade deal with Canada, part of the replacement of NAFTA unveiled Monday by President Trump.
“I’m not in the habit of praising this administration, but the headlines leave me cautiously optimistic there’s some good stuff in this agreement,” said Rep. Jim Himes, D-Conn., who has crossed swords with the Trump administration over Russian interference in the 2016 U.S. election and other issues.
Trump ran on a pledge to ditch the North-American Free Trade Agreement, calling it a job-killing “disaster.” The promise helped attract votes from workers whose jobs had been exported to lower-wage nations such as Mexico.
The new pact, the United States-Mexico-Canada Agreement, will “transform North America back into a manufacturing powerhouse,” Trump said Monday during a Rose Garden announcement.
The new agreement at least partially lifts some of the barriers Canada had imposed on dairy exports from the U.S. And it also restricts Canada’s ability to undercut U.S. prices on dairy powders.
“It’s a big positive, no doubt about it,” said Ben Freund, who milks 100 cows on the 400-acre farm he owns in East Canaan in rural Northwestern Connecticut. “We’ve been in a position of indecisiveness with all saber-rattling over trade. So this will help stabilize the market, which is always a good thing.”
Connecticut is not among the nation’s major dairyfarming states. With milk production at 420 million pounds in 2017, the state ranked 34th of 50 nationwide. It’s 19,000 cows yielded about 22,000 pounds per cow that same year, according to USDA data.
Like their counterparts in other states, Connecticut dairy farmers have been plagued by an over-abundance of milk and resulting low prices. This year’s Farm Bill promised relief in the form of higher subsidies, but it has been tied up in negotiations between House and Senate over conflicts in the versions each passed.
With low prices in a small state in the middle of the Northeast corridor, Connecticut dairy farmers face economic incentives to sell their acreage to land developers of all kinds. Freund said he had recently received an inquiry from a company that wanted to lease 100 acres for a solar project.
“We look forward to farming here a good long time, but there are pressures,” Freund said.
Overall, Connecticut businesses of all kinds exported $14.7 billion in goods and services in 2017. The robust figure had been cited by Himes and other Connecticut lawmakers as a reason why the Trump policy of raising tariffs to protect American workers ultimately could harm the state’s economy.
Exports of consulting knowledge from the financial-services industry in Fairfield County, principally in Stamford, had grown substantially since NAFTA, Himes said. So the new agreement is unlikely to affect that sector one way or the other.
The effect on manufacturing may be harder to gauge. NAFTA and other trade agreements certainly hastened the demise of Connecticut manufacturing strongholds such as Bridgeport — though decline in a factory inventory dating back to the 19th century may have been inevitable.
But 24 years after NAFTA came into existence, the landscape of factory production has shifted from old smokestack industry to new more-antiseptic advanced manufacturing. These businesses, many of them defense-related, employ fewer workers but pay well for employees with good mathematical and technical skills.
Rep. Rosa DeLauro, DConn., said the jury was still out on whether the new trade deal would benefit Connecticut workers and businesses.
“For decades, NAFTA has driven down workers’ wages and shipped good-paying jobs overseas,” she said in a statement. “The final deal must remove the current outsourcing incentives, raise wages for American workers, and include strong labor and environmental standards with swift and certain enforcement mechanisms for Democrats to approve it.”