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Donald Trump says the United States is close to reaching a deal with Canada and Mexico on changes to the North American Free Trade Agreement, but there’s no word yet if the new and presumably improved pact will benefit U.S. farmers and ranchers.
There was plenty of opposition to the North American Free Trade Agreement even before it went into effect in 1994.
The treaty was negotiated under President George H.W. Bush’s administration and became an issue in his 1992 re-election campaign. Independent candidate Ross Perot famously remarked that if NAFTA was ratified American workers would hear a “giant sucking sound” of their jobs going south to Mexico.
Labor unions agreed. But to their chagrin, President Bill Clinton supported NAFTA and signed it once ratified.
Unions blame NAFTA for destroying U.S. manufacturing jobs. Trump picked up on that riff as part of his campaign opposition to what he termed “unfair” trade deals. Last year the president threatened to pull out of the pact unless Canada and Mexico renegotiated.
Agriculture has a big stake in NAFTA. Since the pact took effect, ag exports to Canada and Mexico have increased from $8.9 billion to more than $38 billion.
But not everyone is completely satisfied.
Wheat growers, for example, say the pact has opened up the Mexican market, increasing exports by 400 percent. At the same time, they have a beef with Canada. Canadian wheat sold at an elevator in the U.S. is rated the same as if it were produced here. But U.S. wheat delivered to an elevator in Canada is rated as feed wheat and priced accordingly.
There’s no incentive for U.S. farmers to take wheat to Canada, but Canadian farmers are on an equal footing with U.S. producers when they sell here.
Dairymen take issue with Canada, too. U.S. and Mexican dairy groups have a common interest in pressing for better treatment when products go north.
Producers of seasonal fruits and vegetables say Mexican growers who can produce crops year round can flood the U.S. with cheaper product. They want new rules that will make it easier for them to file anti-dumping complaints.
Have any of these issues been addressed? No one really knows.
Some Trump critics say the administration, despite the president’s bluster, is striking a more conciliatory tone in order to close the deal and claim victory. They note that Trump had harsh words for a trade pact with South Korea, but terms agreed to so far are not dramatically different. They also say having entered into an escalating trade tiff with China, an opponent that can match his rhetoric, he can’t afford to have NAFTA in the loss column.
Whether true or not, maybe a deal that more or less maintains the status quo is for the best. American farmers can’t afford to lose NAFTA.