Ag groups urge Trump to stick with NAFTA
WASHINGTON—Agriculture groups are urging the Trump administration to remain in the North American Free Trade Agreement upon reports that the White House is considering a draft executive order to withdraw from the longstanding trade deal.
"Withdrawing from NAFTA would be disastrous for American agriculture," National Corn Growers Association president Wesley Spurlock said in a statement. "We cannot disrupt trade with two of our top trade partners and allies. This decision will cost America's farmers and ranchers markets that we will never recover."
NAFTA, implemented in 1994, over time eliminated almost all agricultural tariffs and quota restrictions among the U.S., Canada and Mexico. President Donald Trump and others blame NAFTA for losses to the manufacturing industry, but U.S. agriculture generally has benefited from the agreement.
Philip C. Abbott, professor of agricultural economics at Purdue University, says pulling out of trade agreements could mean a return to more tariffs and quotas. He says any trade agreement in place for almost a quarter-century probably could be improved by renegotiation. However, many people saw the Trans-Pacific Partnership, another trade agreement tossed out by the Trump administration, as that renegotiation and as a "super NAFTA" since all of the NAFTA countries were involved in the TPP.
Sen. Heidi Heitkamp, D-N.D., has spoken out about the potential impact of "reckless" trade policies on North Dakota farmers and ranchers. In a statement on Wednesday, she again signaled her displeasure at such moves.
"Fully withdrawing from NAFTA—rather than carefully renegotiating it—would create chaos for North Dakota farmers, ranchers and workers," said Heitkamp, a member of the Senate Ag committee. "We must support American workers while also enabling North Dakota farmers to sell their crops abroad. Standing up for rural America must be a priority as any trade deal is renegotiated."
Sen. John Hoeven, R-N.D., also a member of the Senate Ag committee, also expressed some concern about the potential move.
“We should only renegotiate portions of NAFTA if we know we can actually get better trade terms for our agricultural producers and manufacturers," he said in a statement.
The Minnesota Farm Bureau expressed concern about the potential move. Kevin Paap, the president of the organization, in a statement said 27 percent of Minnesota's agricultural exports go to Canada or Mexico.
"During President Trump's recent meeting with farmers, he emphasized his attention to improving opportunities in agriculture," Paap said. "However, while there are opportunities to modify and modernize the current NAFTA agreement, withdrawing from this trade agreement would severely and negatively impact Minnesota's farmers and ranchers."
Spurlock pointed out that Mexico is the top export market for corn, and Canada is a top export for corn and ethanol. The U.S. Department of Agriculture's Economic Research Service's 2015 report, "NAFTA at 20: North America's Free-Trade Area and Its Impact on Agriculture," says U.S. corn exports to Mexico have more than quadrupled from the volume exported there from 1984 to 1993.
"With a farm economy that is already weak, losing access to these markets will be a huge blow that will be felt throughout the ag value chain," Spurlock said.
Reuters reported soybeans, wheat and corn declined on Wednesday, with some blaming the downfall on jitters over the report that the White House is considering pulling out of NAFTA.
"The possibility of withdrawing from NAFTA is a very scary thing for corn, because we do a lot of export business for corn (to) Mexico," said Ted Seifried, chief market strategist with the Zaner Group in Chicago.
American Soybean Association President Ron Moore, a soybean farmer from Roseville, Ill., said in a statement that the administration should abandon plans to withdraw from NAFTA and instead work on ways to "modernize and optimize the agreement during a renegotiation."
Moore added that newly confirmed U.S. Agriculture Secretary Sonny Perdue and Robert Lighthizer, who is awaiting confirmation as U.S. trade representative, should be given time to have input on NAFTA modernization.
Moore said U.S. soybean farmers exported more than $2.5 billion in soybeans, meal and oil to Mexico last year, making it the No. 2 market overall for U.S. soybeans and the leading purchaser of U.S. meal and oil. Canada is No. 3 in meal sales and No. 10 in oil.
"Add to that the sales of meat, dairy and eggs that require soy meal as animal feed, our North American partners are unquestionably among the most vital and vibrant markets for American soybeans," Moore said.
U.S. Wheat Associates and National Association of Wheat Growers officials said Mexico is the largest U.S. wheat buyer and imported more than 10 percent of all U.S. wheat exports this year.
"NAFTA truly opened the door to the strong and growing market opportunity in Mexico," a statement from the organizations said. "Closing that door would be a terrible blow to the U.S. wheat industry and its Mexican customers."
Kent Baucus, director of international trade and market access for the National Cattlemen's Beef Association, says the U.S. "cannot afford to walk away from two of our greatest export markets on a gamble" given the state of the cattle market, with volatile prices and increasing worldwide competition.
"There are some things that sound good politically but are potentially dangerous in the real world. For the U.S. beef industry, withdrawing from NAFTA is one of the most dangerous moves we can make at this time," he said. "NAFTA brought us duty-free and unlimited market access to Canada and Mexico. How do you improve upon that?"
(Reuters contributed to this report.)