Farmers and other trade-dependent businesses need to be outspoken in order to keep North American Free Trade Agreement (NAFTA) renegotiations from falling apart and irreparably hurting the Iowa and U.S. economies, U.S. Chamber of Commerce Senior Vice President Neil Herrington said in Des Moines last week.
“This debate will not be won in Washington, D.C.,” Herrington said during a NAFTA trade forum hosted Feb. 9 by the Iowa Farm Bureau, Greater Des Moines Partnership and Iowa Association of Business and Industry. “The debate will be won in key areas across the United States, including Iowa.”
Nearly 50 percent of Iowa exports are shipped to Canada and Mexico, totaling $5.6 billion in value, including more than $1.2 billion in corn, soybeans, beef, pork, dairy and turkey. Economists say withdrawing from NAFTA, which has been suggested by some Trump administration officials, would put 138,000 Iowa jobs at risk.
“With the threat of NAFTA withdrawal pending, it’s critical that we recognize how important this agreement is for businesses, manufacturers and industry,” Iowa Sen. Joni Ernst said in a statement. Ernst was scheduled to speak at the Des Moines forum but was unable to attend due to congressional budget negotiations that stretched into the early morning hours on Friday.
“We know NAFTA works,” said Ernst. “I will work to make sure any changes to NAFTA do not harm crop and livestock farmers, businesses or industry.”
Talking about NAFTA’s benefits in both work and social settings is important because many people — even those employed by exporting companies — don’t understand how important trade is, said Kevin Ekstrand, vice president of sales and marketing for Scarbrough International, a Midwest import-export freight and transportation broker.
Changing the rhetoric
“We’ve got to change the rhetoric around trade,” he said.
Canada and Mexico are the primary destinations for the products shipped by Scarbrough, and the company is making investments to grow those markets, he said.
“We have been encouraging small businesses to take a leap into exporting by going to Canada first,” said Ekstrand.
North American trading partners are a natural fit for exports from Iowa companies, said Tony Hogan, president and CEO of Kreg Tool in Huxley. Kreg Tool, which has 225 employees, sells products in 60 countries, but 50 percent of its exports go to Canada, he said.
“We treat Canada as an extension of the United States,” said Hogan. “International sales are critical to our growth. Continuing to have free trade and access to Canada is essential to that. Anything that would disrupt that is concerning.”
$80 billion in ag trade
U.S. agricultural trade with Canada and Mexico totals more than $80 billion annually, noted Dave Miller, Iowa Farm Bureau director of research and commodity services. Canada has historically been the top market for U.S. ag exports, and Mexico typically ranks second or third, he said.
Statements by U.S. officials threatening to walk away from NAFTA is causing Canada and Mexico businesses to start looking for other trading partners that may steal market share away from U.S. farmers, said Mark Recker, a Fayette County Farm Bureau member and president of the Iowa Corn Growers Association.
“There’s opportunities for other countries to move in there. That’s unfortunate,” he said. “Once we cede them, you can’t get those markets back.
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