In recent months, President Donald Trump has threatened to renegotiate the terms of the National American Free Trade Agreement in hopes of reducing U.S. trade deficits. Should he follow through on this, the agricultural industry and farmers may face negative consequences.
According to ABC News, the U.S. ran small trade surpluses in Mexico and a slight deficit in Canada at NAFTA’s start in 1994. These deficits have progressively increased.
In the last year, there was a $64 billion dollar deficit between the U.S. and Mexico and a nearly $11 billion gap with Canada. According to The New York Times, neither of these trade deficits are as large as they could be, but they are at all-time highs. To combat this, Trump wants to update the terms of the agreement.
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Hilary Worcester, coordinator of talent and industry partnerships at the Mid Kansas Cooperative, works to advocate for agricultural industry. Worcester said some farmers, who have reaped benefits from NAFTA, fear the consequences of the potential renegotiation.
“The NAFTA agreement has opened gates for the U.S. farm exports and has benefited many farmers over the years,” Worcester said. “As a person who works heavily with many farmers through the cooperative system, I feel like many are concerned that pulling out of NAFTA would hurt their export opportunities, even when they are already facing low crop and livestock prices.”
By updating the terms of NAFTA, Trump hopes to bring low-wage and factory jobs back into the U.S. from Mexico.
“If the Trump administration takes similar action on NAFTA as it did on the Trans Pacific Partnership and pull out of the trade agreement, Kansas farmers and ranchers will lose the markets they depend on for grain and beef exports,” said Jessica Johns, senior in philosophy and political science.
According to Deutsche Welle, the Trump administration plans to move forward with updating NAFTA regarding intellectual property rights, enforcement of regulations and changes in labor, services and the environment.
Wade Stroda, senior in agricultural technology management, said he has no qualms about updating NAFTA as long as the U.S. does not repeal it completely.
“As a farmer here in Kansas, NAFTA will affect us directly, as it will influence the markets,” Stroda said. “Corn, soybeans and wheat are some of the biggest export crops in agriculture trade, and being a wheat and soybean farmer in the U.S. worries me about the possible withdrawal from NAFTA. I don’t see a problem with possible updates to the agreement, but overall, the U.S. needs to stay to ultimately help farmers manage moving toward the future.”
In addition to corn, soybeans and wheat, Johns said changes to NAFTA may hinder the export of beef to Mexico.
“This market is irreplaceable in terms of Kansas farm and ranch income, and its loss would have a devastating effect in both the short and long run,” Johns said. “NAFTA is essential to the continued prosperity of the American agriculture industry — without it, the future of ag income is bleak at best.”