Train cars at grain facility

NAFTA withdrawal order brings backlash from commodity groups

Reports of presidential order withdrawing U.S. from NAFTA creates heartburn for commodity leaders.

Fifty points. That’s how much the collective blood pressure of the chief executives of the major farm organizations went up Wednesday (April 26) after reports said the president planned to sign an executive order withdrawing the U.S. from NAFTA immediately.

The president later backed away from the directive – an action that is becoming all too common with this administration – saying he had talked with the presidents of Canada and Mexico, and they had assured him they would “move swiftly” to renegotiate the agreement.

In the three or four hours between, the leaders of the major farm organizations responded with a torrent of criticism. The American Soybean Association, National Association of Wheat Growers, U.S. Wheat Associates and the U.S. Food and Agriculture Dialogue for Trade and others blasted the report.

Ron Moore, an Illinois farmer and president of the American Soybean Association, warned such a move could have “disastrous consequences for the nation’s agricultural exports.” At least one Republican member of Congress also said leaving NAFTA would be a disaster.

Ironically, the report occurred the same day of a Farm Foundation Forum on “The Future of the North American Free Trade Agreement.” The Washington-based Foundation promotes objective policy discussions on food and agriculture.

The Forum’s speakers – Linda Dempsey of the National Association of Manufacturers; Bob Stallman, the former president of the American Farm Bureau Federation; and Melissa San Miguel with the Grocery Manufacturers Association – all agreed the trade agreement with Canada and Mexico needs modernizing.

Dempsey, vice president of international economic affairs for NAM, reminded the audience NAFTA was launched before “you could hold your computer in your hand,” and the agreement doesn’t treat exports from each country equally.

But none of them discussed the possibility of just walking away from it. In fact, Stallman, who noted U.S. exports to the other two countries had risen 245 percent in the 23 years since it was launched in 1993, said the agreement could be improved for all three countries “if we don’t do something dumb.

“There’s been a lot of talk about how bad NAFTA is (a frequent complaint by President Trump on the campaign trail), and it just isn’t true,” said Stallman, a rice farmer from Texas. “NAFTA has its problems, like all trade agreements, but, overall, it’s been good for U.S. agriculture and for the U.S. economy.”

The on-again, off-again series of events may have also been unsettling for former Georgia Gov. Sonny Perdue, who was sworn in as secretary of agriculture the day before the reports of the president’s executive order hit. If he had any doubts before, it’s clear the new secretary has his work cut out for him on the trade front.

Note: The American Soybean Association issued another statement today (April 27), thanking the president for announcing the U.S. would remain a member of the North American Free Trade Agreement.

“We are relieved by the president’s decision that the United States will work on improving the NAFTA rather than withdrawing from it, and we will continue to closely monitor negotiations as they move forward,” said ASA President Ron Moore.

“When you’re talking about $3 billion in soybean exports a year, any threats to withdraw from agreements and walk away from markets makes farmers extremely nervous. We remain supportive of efforts to modernize NAFTA and further expand access for U.S. soy in Mexico and Canada, and we look forward to working with the administration to realize these goals.”

Moore said it would be important to get Agriculture Secretary Sonny Perdue involved in the discussions and called on the Senate to swiftly confirm Ambassador Robert Lighthizer as U.S. Trade Representative.

“It is clear that Secretary Perdue sees the link between increased access to global markets and success for American farmers,” said Moore. “We are grateful that he was sworn in this week"

 

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