Farm groups denounce possible NAFTA withdrawal
Amidst reports today that President Donald Trump will consider an executive order withdrawing the U.S. from the North American Free Trade Agreement, farm groups quickly denounced the idea.
Tom Sleight, president of the U.S. Grains Council, which promotes the exports of barley, corn, sorghum and their co-products, including ethanol, said in a statement, “We are shocked and distressed to see news reports that the Trump administration is considering an executive order to withdraw the United States from the North American Free Trade Agreement.
“Mexico and Canada are among our largest and most loyal grain export markets, and our organization has worked closely with partners in both countries for more than 30 years.
“An executive order as reported will have an immediate effect on sales to Mexico, market prices and the profitability of U.S. farmers, who are already facing below-cost-of-production prices. Our top grain market is not a negotiating tactic.
“There is strong support and rationale to update and modernize NAFTA. Before today, we believed we were on track to have a reasonable discussion about how to update the agreement in ways that make sense for all parties. We hope we can get back to that position soon.”
U.S. Wheat Associates, which promotes wheat exports, and the National Association of Wheat Growers said they “are alarmed over media reports today that the Trump administration is considering a withdrawal from the NAFTA.
“Mexico is our largest U.S. wheat buyer, importing more than 10 percent of all U.S. wheat exports this year,” the groups said. “NAFTA truly opened the door to the strong and growing market opportunity in Mexico. Closing that door would be a terrible blow to the U.S. wheat industry and its Mexican customers.”
USW and NAWG “understand that there are several elements of the trade agreement that could be re-examined and modernized. “However, we believe withdrawing from NAFTA would be a serious mistake. It could lead to new tariffs on U.S. wheat and threaten to undermine the long-standing, loyal relationship U.S. wheat farmers have built with Mexico’s wheat buyers and food industry. That would be devastating to U.S. wheat farmers already facing unprofitable prices and increasingly aggressive wheat exporting competitors,” they said.
“Abandoning NAFTA and going back to pre-NAFTA tariffs would be financially devastating to U.S. pork producers,” National Pork Producers Council President Ken Maschhoff said. “Tens of thousands of U.S. jobs dependent on those exports would be lost.
“The bottom line is U.S. pork trade with Canada and Mexico has been very robust, and we need to maintain and even improve that trade. We’re all for modernizing NAFTA, but we cannot support efforts that would undermine the livelihoods of America’s 60,000 pork producers.”
National Corn Growers Association President Wesley Spurlock said, “Mr. President, America’s corn farmers helped elect you. We are strong supporters of your administration and continue to stand ready to work with you to build a better farm economy. That begins with strong trade policy.
“Withdrawing from NAFTA would be disastrous for American agriculture. We cannot disrupt trade with two of our top trade partners and allies. This decision will cost America’s farmers and ranchers markets that we will never recover.
“NAFTA has been a huge win for American agriculture,” Spurlock continued. “Corn and corn product exports today account for 31 percent of farmer income. Mexico is the top export market for corn. Canada is also a top market for corn and ethanol. With a farm economy that is already weak, losing access to these markets will be a huge blow that will be felt throughout the ag value chain.
“Mr. President, agriculture and rural America are counting on you. We urge you not to withdraw from NAFTA,” he concluded.
American Soybean Association President Ron Moore, a soybean farmer from Roseville, Ill., said, “Without mincing words, initiating a process to withdraw from NAFTA is a terrible idea, and it will only mean a longer and more difficult struggle for farmers to recover in this economy. With surplus production and domestic prices lagging, we need more opportunities and easier avenues to sell our products abroad, and signaling the U.S. intent to withdraw from NAFTA runs absolutely counter to that goal.
“Soybean farmers sent more than $2.5 billion in soybeans, meal and oil to Mexico last year, making it our No. 2 market overall and the leading purchaser of U.S. meal and oil. Canada is No. 3 in meal sales and No. 10 in oil. Add to that the sales of the meat, dairy and eggs that require soy meal as animal feed, our North American partners are unquestionably among the most vital and vibrant markets for American soybeans,” Moore said.
“If any actions to announce the intent to withdraw from NAFTA are underway, the administration should immediately abandon such plans and focus instead on ways to work with Canada and Mexico to modernize and optimize the agreement during a renegotiation,” he added. “ASA has been supportive of the administration’s efforts to improve NAFTA. That’s where the action should be; beginning withdrawal procedures before modernization negotiations even take place are counterproductive and send the wrong signal. Further, a U.S. trade representative is still waiting to be confirmed, and Agriculture Secretary Sonny Perdue just was sworn in yesterday. We need to give both time to have input on NAFTA modernization.”
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I want to address a couple of issues in this week’s editor’s note.