It’s Time to Bring NAFTA Into The 21st Century
(Picture Courtesy: Indiana University)
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThroughout the 2016 campaign, there was overwhelming rhetoric surrounding the North American Free Trade Agreement permeating speeches from then-candidate Donald Trump. At that time, Trump was expressly considering whether separation from NAFTA was in our country’s best interest. Now, fortunately, the President has reconsidered that position and it seems that he is adamant about renegotiating NAFTA rather than abandoning the trade agreement altogether. Farmers in the Hoosier state depend on NAFTA as an export catalyst and job creator. And I applaud the President for taking interest in this essential trade agreement.
U.S. agriculture has seen tremendous benefits from NAFTA. The agreement has allowed the U.S. food and agriculture industries to flourish, and those industries now support over 43 million jobs. At the state level, Canada and Mexico rank as the top three agricultural export markets in 37 states. All in all, agricultural exports to Canada and Mexico have increased by 450 percent under NAFTA and fruit and vegetable exports to Canada and Mexico have more than tripled.
Because of this, 130 leading food and agricultural organizations recently sent a letter to President Trump expressing their eagerness to work with the administration on ways to modernize NAFTA in ways that preserve and expand upon the gains already achieved. Needless to say, U.S. farmers are steadfastly behind renegotiating this essential trade agreement as opposed to completely withdrawing from it. The Agribusiness Council of Indiana stands at the ready to help in any way that we can.
Without NAFTA, $3 billion in annual soy exports would be jeopardized as Mexico and Canada would surely look to our competitors in South America who, without NAFTA, would be able to undercut us on the cost of labor. U.S. production of corn would fall by an average of 150 million bushels annually, erasing $800 million in value and increasing the need for farm program payments by $1.2 billion. Finally, withdrawing from NAFTA would decrease total U.S. pork production by 5 percent, resulting in an aggregate industry loss of around $1.5 billion, jeopardizing more than 16,200 U.S. jobs.
Indiana depends on the agriculture industry to an enormous extent. It effectively props up our economy, and farm exports are a very significant part of that. In 2016, of the $1.4 billion in total Indiana food and agricultural product exports, $573 million went to NAFTA partner nations. That is 42 percent of all exports of this kind. The industry currently supports more than 870,000 jobs and $37 billion in wages throughout our state. In short, Indiana’s economy would be devastated by the U.S. leaving NAFTA. But, renegotiated terms could significantly help our state and the agriculture industry as a whole.
A successful NAFTA reboot must expand access for our agricultural goods. It must reduce unnecessary regulatory and nontariff barriers that block U.S. agricultural exports. It must reduce the bureaucratic delays and endless red tape that plague major export industries. And, finally, it must enhance the fairness in the treatment of agricultural exporters when involved in trade disputes.
NAFTA has allowed greater access to affordable products and food for American consumers and has aided in our efforts toward energy independence. But its modernization is necessary to bring it into the 21st Century with a focus on ensuring fair and balanced trade in today’s economy. We cannot afford to forget the immense benefits we have and continue to receive from it.
Amy Cornell is the current president of the Agribusiness Council of Indiana.