Ag Groups Make a $30 Billion Case For NAFTA

October 13, 2016 10:18 AM
 
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Trade is a heated line of debate on the campaign this year, with GOP nominee Donald Trump taking shots at the North American free trade agreement, calling it “the worst trade deal maybe ever signed anywhere” and threatening to pull out of the deal. Trump's ag adviser Sam Clovis recently told AgriTalk host Mike Adams the 21 year-old trade deal is out of date.  

 “We think it's time to review NAFTA,” Clovis says. “We don't want to get rid of it, we want to review it.”

But agricultural groups like American Farm Bureau say when you look at NAFTA by the numbers, it's a deal that works for agriculture. It has moved the trade needle by about $30 billion dollars, according to Veronica Nigh, American Farm Bureau economist. 

“In the 21 years since that agreement came into force, U.S. ag exports have more than quadrupled from about $9 billion to $39 billion,” she says. “Because of that free trade agreement, we have a market share in those two countries of about 65 percent.”

NAFTA By The Numbers

Looking at it by country, Canada was the No. 1 consumer of U.S. agricultural goods in 2015 and the top buyer of U.S. fresh fruits and vegetables. Mexico ranks No. 3 on the overall list, but is the top destination for U.S. corn, poultry and soybean meal. 

“They have a huge cooking oil market in Mexico and Costa Rica, and U.S. soybeans are the prime source of soybean cooking oil,” says Ron Moore, Vice President of American Soybean Association and Roseville, Ill., farmer.

Today, Mexico has the highest proportion of overweight and obese children in the world, a startling fact that Moore says makes U.S. soybean oil an attractive option. 

“The high oleic is very heart-healthy, and that's very key in what they're trying to promote in their population,” he says.

Mexico also purchases 23% of all U.S. corn exports, but it's the country’s growing demand for protein that could provide an added boost.

“If we can feed our corn in the U.S. to our animal industry and the livestock industry, and export that finished product, that's the biggest value we can get,” says Wesley Spurlock, Vice President of National Corn Growers Association and farmer in Stratford, Texas.

Mexico is currently the largest market in terms of volume for U.S. poultry and pork, and the second biggest for beef. 

“On the livestock side, we’ve certainly seen a lot more trade in the hog market between Canada and the United States, and in the beef market, a lot of trade between all three countries,” Nigh says.

The dairy industry echoes these sentiments, saying the possibility of walking away from NAFTA could be detrimental to dairy. 

“Mexico is our No. 1 dairy trading partner, and Canada can be No. 2 or No. 3,” says Jim Dickrell, editor of Dairy Herd Management. “If NAFTA does get torn up and they somehow renegotiate that, it could have dire consequences for U.S. dairy producers.”

For groups like sugarbeet growers, products coming into the U.S. create issues. The group says NAFTA is one of those trade deals they view as unfair. 

“NAFTA is a challenge for us because it would have given some countries, specifically Mexico, free reign to ship into the United States,” explains Duane Maatz, Executive Producer, Red River Sugarbeet Growers Association.

Maatz says just last year, the U.S. and Mexico created a suspension agreement, designed to keep sugar from entering the country illegally. 

“The suspension agreement should keep Mexico to shipping the right quantities in the right form and the right quality sugar into our country at the right level,” he says.

Even with the suspension, he says there are still loopholes allowing sugar to enter the U.S. in sub-standard forms, then processing it into other products. Despite Mexico being the U.S. sugar industry's top competitor, even those growers don't want to see NAFTA go away. 

“We know to just throw it out would not be working together as an agricultural industry,” Maatz says.

While trade remains under the microscope this election, other ag groups say exports to Canada and Mexico are creating real value for U.S., and it’s an agreement that should remain untouched. 

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