WASHINGTON, Feb. 22, 2017 – The recent uncertainty surrounding the fate of the North American Free Trade Agreement under the Trump administration is spurring Kansas and Missouri officials to speak out in defense of the trade pact and highlight the billions of dollars of farm exports the states sell to Mexico.
Losing NAFTA would be a catastrophe, Chris Chinn, the director of the Missouri Department of Agriculture, said today at a forum held by the Agricultural Business Council of Kansas City.
Before NAFTA was implemented in 1994, Missouri exported about $656 million worth of goods to Mexico each year. By 2015 that total was up to $1.9 billion, Chinn said, with farm commodities accounting for almost of that total.
“If it wasn’t for trade, we’d lose a lot of jobs in Missouri,” she said, stressing that farmers need to speak up in the defense of NAFTA.
But President Trump is blaming trade with Mexico under NAFTA for a loss of jobs in the U.S., mainly the manufacturing sector. Trump has called for a renegotiation of trade ties between the U.S., Mexico and Canada under NAFTA and he’s also threatened to pull the U.S. out of the pact.
Bob Young, chief economist for the American Farm Bureau Federation and a speaker at the Kansas City event, said because domestic demand in the U.S. has plateaued, it is increasingly important to boost exports and keep strong relationships with countries like Mexico and Canada.
Young brought up the recent debate in the U.S. over a proposed border tax on Mexican imports that Trump has suggested as a funding source for his promised wall on the southern border. Shortly after Trump floated the idea, Mexican President Enrique Pena Nieto canceled a planned visit to the White House.
Young stressed that what Trump was talking about was a Republican proposal for a “border adjustment tax” that would apply to dozens of foreign countries, not just Mexico.
Regardless of the recent developments, trade ties with Mexico are deep, said Young and other speakers at the event.
Chad Bontrager, deputy secretary of the Kansas Department of Agriculture, told the gathering that expanding trade is more important than ever because farmers are suffering from low crop prices.
Mexico is currently investing in thousands of new ethanol-dispensing gas stations, he said, and American corn farmers and fuel producers stand to benefit so long as the trade relationship between the countries remains strong.
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Following up on today’s forum, the Agricultural Business Council of Kansas City and the St. Louis AgriBusiness Club are sending a letter to Senate Agriculture Committee Chairman Pat Roberts, who represents Kansas. The letter, a copy of which was viewed by Agri-Pulse, says the groups support “modernizing” NAFTA, but stresses the need to protect the tariff-free trade relationship the U.S. has with Mexico.
“Our immediate geography has been a huge beneficiary of NAFTA with a significant amount of grain and other products from the region flowing directly to Mexico,” the letter says. “This is a market that was not significant prior to NAFTA.”
The letter goes on to lay out the top agriculture and food exports to Mexico last year, including $229 million worth of soymeal and $170 million of corn from Missouri, as well as $274 million of corn and $179 million of wheat from Kansas. Also listed are exports of $195 million of corn and $88 million worth of pork from Illinois.
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