Ag moving into an anxious era on world trade
You don’t have to hang out in Washington, D.C., very long these days to realize that we are entering a very anxious period for agricultural trade. That fact was double underlined, and highlighted a couple of times, last week for Iowa Farm Bureau leaders as they visited with lawmakers and the embassies of Canada and Mexico in the nation’s capital.
Export sales have long been important for crop and livestock farmers. But in today’s era of surpluses and low prices for corn, soybeans, meat and milk, exports have become even more critical, the Farm Bureau leaders said.
But like the weather in Washington last week, the current trade climate feels like it’s encountered a chilly spell. In one of his first actions as chief executive, President Donald Trump pulled the United States out of the Trans-Pacific Partnership (TPP). He has also strongly criticized the decades-old North American Free Trade Agreement (NAFTA) and wants it renegotiated.
NAFTA the real deal
TPP offered promise to boost sales to Asian countries. But NAFTA is the real deal. It has delivered solid export gains to farmers since 1994, when it kicked in.
A recent report from Iowa-based Decision Innovation Solutions noted that Canada and Mexico are the second- and third-largest importers of U.S. ag goods, just behind China. A lot of those sales to our neighbors are Iowa products: corn, soybeans, pork and beef.
At the same time, the United States is the primary ag export market for both neighbors to the north and the south. Canada, for example, is a big supplier of pigs that are finished in Iowa. And what would a Super Bowl party be without guacamole from Mexican-grown avocados.
The value of ag trade in the NAFTA countries can’t be stressed enough, the ag officials from both Mexico and Canada told their Iowa visitors. While they understand the need to update and modernize NAFTA, the officials urged Farm Bureau leaders to continue to remind their lawmakers and the Trump administration of the value of NAFTA to U.S. farmers.
"Agriculture has really been a star in the NAFTA era, and that’s a relationship we need to build on," said Kenneth Smith Ramos, director of the NAFTA office in the Mexican Embassy. "Any step to wall each other off would be a big step in the wrong direction."
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