WASHINGTON, D.C. — The future of trade agreements in the United States has made leaders in other countries anxious and some have begun looking for other sources of commodities typically purchased here.

 

The North American Free Trade Act, or NAFTA – the 25-year-old agreement among the U.S., Canada and Mexico – is currently under heavy review. Last week, President Trump talked about withdrawing from the agreement completely by the weekend, before announcing that change would not take place without further study.

 

The talk has caused Mexico and Canada to start considering other sources for needed products. The Mexican government is looking to agreements with South America and Asia for rice and corn, while Canada is currently not importing expected quotas of U.S. dairy.

 

NAFTA was the focus of last week’s Farm Foundation Forum, which was rescheduled from a few weeks ago. Late that day, rumors circulated that the White House was working on an executive order to withdraw the United States from the agreement.

 

Many agricultural organizations, from the American Soybean Assoc. to the National Corn Growers Assoc. and the U.S. Wheat Assoc., said NAFTA opened the door to their strong and growing markets in Mexico. Leo McDonnell, trade committee chair for the U.S. Cattlemen’s Assoc., said the USCA supports Trump’s efforts to address concerns and potential issues with the trade agreements in which the U.S. is currently engaged.

 

“Over recent decades, NAFTA has continued to be under scrutiny for unfair trading practices across multiple industries. Trade violations have trickled down to U.S. cattle producers, resulting in distorted and unfair feed prices and causing harm to U.S. feeders. The proposal to review and renegotiate specific sections of the trade agreement is necessary,” he said.

 

McDonnell said his concern is that products cannot be labeled for origin information. “For the U.S. beef industry, withdrawing from NAFTA is one of the most dangerous moves we can make at this time. With volatile cattle prices and increasing competition abroad, we cannot afford to walk away from two of our greatest export markets on a gamble,” said Kent Bacus, director of international trade and market access for the National Cattlemen’s Beef Assoc.

 

“NAFTA brought us duty-free and unlimited market access to Canada and Mexico. How do you improve upon that?”

 

Bob Stallman, past president of the American Farm Bureau Federation and a rice and cattle producer in Texas, said the agreement has benefited all three countries when it comes to agriculture. He said those in favor of NAFTA find figures to support trade while people against it can find figures that oppose trade.

 

The U.S. gross domestic product has been increased only a small amount as a result of NAFTA, about half a percent, but jobs have been created, he said. Tariffs on food items have dropped. Mexico has become the single largest importer of American rice and corn. Now, the Mexican government is looking elsewhere for those products in the future.

 

“Everyone’s looking at the landscape and trying to figure out how to place themselves in case something happens … They want to be ready to do something if something happens,” Stallman said.

 

He said it is within the president’s powers to withdrawal from NAFTA. “It’s an option, but not a good one,” he added. “It’s been extremely positive for U.S. agriculture.”

 

Another option is to impose tariffs. The  third option is to review NAFTA withrepresentatives from all three countries at the table. “Improve it. Don’t try to do wholesale renegotiations and don’t go  backward. We need to go forward with trade,” Stallman said.

 

Agriculture industries across the board need to step up and talk to the administration and Congress. He said it’s important to encourage the government to make changes, but “don’t do anything dumb.”

 

In addition, he said agriculture needs to make a case to the public about why trade agreements are good and why it matters. “If you don’t step forward and talk (about how it’s good), you’re not going to make an impact. Agriculture can do more. They’ve been making comments, but they haven’t been forceful politically,” Stallman said. “To me, it just makes sense to protect those relationships.”

 

He thinks reviewing NAFTA can benefit all three countries. Many things have changed in the last 30 years, from technology to scientific knowledge.

 

“Trade negotiations are very complex … getting those details right is very important in trade agreements,” Stallman said. “Trade agreements are about sitting down together and coming to an agreement.”

 

Linda Dempsey, vice president of International Economic Affairs for the National Assoc. of Manufacturers (NAM), said trade agreements create jobs. Right now, manufacturers in America are having difficulty finding qualified workers and the problem is going to continue. In the next decade, manufacturers estimate there will be 2 million unfilled jobs, from electricians to research scientists.

 

“Manufacturing isn’t disappearing. It’s changing and it’s transforming. Modern manufacturing doesn’t look a lot like the manufacturing we grew up with,” Dempsey said. “We remain the backbone of the U.S. economy and are manufacturing more than ever.” 

 

The problem is that factories might consolidate, while other facilities close and no new opportunities come into the community quickly. Workers lose their jobs and impact local communities, she said. In some factories, the number of employees is decreasing while output is increasing.

 

“While it’s true that trade is often used as a scapegoat, America manufactures more today than ever before, but does so with fewer workers,” she said. Education and training need to change. Workers need to learn skills to help throughout their careers, to future-proof their careers.”

 

Dempsey said NAFTA was the first modern trade agreement before internet was freely accessible and modern technology was available on farms, and intellectual property rules need to be revised.

 

“For manufacturers in the U.S., North America is the largest and most important market ... The U.S. now exports more than half of what we manufacture,” she said, adding one-third of all manufactured goods are sold to Mexico or Canada.

 

“As we work to improve this agreement, we cannot put at risk the millions of manufacturing jobs already dependent on it.”

 

She said without NAFTA, tariffs into Mexico would be about twice as high as Mexican goods entering the United States. The idea of long-term negotiations worry American manufacturers, she said.