If Trump decides to stick it to Mexico in the upcoming NAFTA talks, US farming industry will take a hit. In advance of the talks, the Farm Lobby is Pressuring Trump.
Trump blames the North American Free Trade Agreement – the “worst trade deal ever” in his words – for millions of lost manufacturing jobs and promises to tilt it in America’s favor.
But for U.S. farmers the 23-year old pact secures access to stable, lucrative markets in Mexico and Canada that now account for over a quarter of U.S. farm exports.
Another concern is that the mere uncertainty of open-ended trade talks could drive Mexico to alternative suppliers of grains, dairy products, beef and pork.
Next week, U.S. Trade Representative Robert Lighthizer is due to outline the administration’s goals for the NAFTA talks to Congress and the farm lobby has turned up the heat in the past weeks to ensure that its interests will make Lighthizer’s list.
Operating under the umbrella of the U.S. Food and Agriculture Dialogue for Trade, more than 130 commodity groups and agribusiness giants since Trump’s inauguration have been bombarding the new administration with phone calls and letters, public comments to USTR and face-to-face meetings with top officials who have Trump’s ear.
Lobbyists said that Lighthizer, Agriculture Secretary Sonny Perdue and Commerce Secretary Wilbur Ross have been receptive, but the wild card is how Trump ultimately will come down on the talks. They also wonder what concessions Mexico will seek from Washington in the talks due to start in mid-August.
Among the groups involved are the American Soybean Association, Corn Refiners Association and National Grain and Feed Association and firms such as Land O’Lakes, Inc., Tyson Foods, Inc., Louis Dreyfus Company North America, Archer Daniels Midland Co. and others.
For example, U.S. cotton producers, marketers and shippers in mid-June warned the Trump administration that any weakening of NAFTA “would threaten the health of the U.S. industry and the jobs of the 125,000 Americans employed by it.”
Annual U.S. farm exports to Mexico have grown from about $4 billion in 1994, when NAFTA began, to an estimated $18.5 billion this year. With Canada included, that number is forecast to reach $40 billion, quadrupling under NAFTA.
Make China Great Again
It is impossible to predict what Trump will do. He may even flip-flop multiple times at the last second.
But we have a casualty already in this absurd spat with Mexico. Ford moved a plant slated for Mexico to China instead. That was a loss for the US and a loss for Mexico.
For discussion, please seeMake China Great Again: Ford Bypasses NAFTA Dispute By Moving Focus Production to China
In January, Trump mwas bragging. It did not last long.
Stupid things (like this) happen when governments interfere in the free market.
Lose Lose Lose Affair
If Trump opts to protect US manufacturers, American taxpayers will take a hit. And it will not save a single job. Then on top of it, Mexico will likely retaliate against US farm exports.
Manufacturing will suffer, taxpayers will suffer, and the US agricultrual industry will suffer.
A genuine free trade agreement would be a win win win affair, but sadly that will never happen.
Related Articles
- Disputing Trump’s NAFTA “Catastrophe” with Pictures: What’s the True Source of Trade Imbalances?
- Killing the Trade Golden Goose: Farmers Rattled by Trump’s NAFTA Rescinding Plans
Hopefully, common sense prevails. Don’t count on it.
Mike “Mish” Shedlock
Good, divert the research into self driving cars towards automatic produce pickers
A self driving car is like hiring someone to bonk your girlfriend
MAGA!
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Mish posted: “If Trump decides to stick it to Mexico in the upcoming NAFTA talks, US farming industry will take a hit. In advance of the talks, the Farm Lobby is Pressuring Trump.
Trump blames the North American Free Trade Agreement – the “worst trade deal ever” in ”
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You identify that a genuine free trade agreement will not/can not happen, yet whine about Trump trying to gain the best advantage for America. Can’t have it both ways there sport!
The article claims that Mexico AND Canada account for 25% of farm exports…well, if Trump “sticks it” to Mexico, how much of that “25%” will be effected? Certainly not 100% of it, as I suspect Canada receives more food from us than Mexico does. Also, have you looked at all the food which is imported from Mexico to our markets? You can bet it’s much greater than 25% of their productions.
The US has 320 million, relatively wealthy consumers. Canada has 35 million, less wealthy, Mexico has 60 million poor people with 20 million of them living in the US already. Why in the hell are we really concerned about having access to their markets? And why are we so willing to just give away our markets for “free”?
Free trade, as it has been exercised in the past, is the US tax payers subsidizing both US and foreign manufacturers/farmers/producers. That’s not “free”, that exploitation and wealth redistribution. Are you going communist on us there Mish? 😉
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You identify that a genuine free trade agreement will not/can not happen, yet whine about Trump trying to gain the best advantage for America. Can’t have it both ways there sport!
Please think.
1. Trump’s policy is a disaster.
2. Free trade is easy. All any country has to do to get it is do nothing.
3. In practice that will not happen
4. Trump trump “trying” to get a better deal is stupid.
5. Doing nothing is better
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My guess is that this is all hot air. Here in Tucson, btw, we get some Mexican exports of fresh produce,so there is traffic both ways across the border…. But Mexico’s exploding population needs to import food, so I wonder where they would get it, if not the USA.
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It was a LOSS to America no matter what with the current status quo and agreements.
At least Trump is trying something different.
I would rather have a guy in office trying different things and looking for an America first angle to save jobs than the “there is nothing we can so so let us lay down and get raped and donate to my Foundation” attitude we have had for 8 (and 16, etc.) years…
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” Ford moved a plant slated for Mexico to China instead. That was a loss for the US and a loss for Mexico.”
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Look at the Chamber of Commerce and how they make a big deal of each new trade deal that comes as a gift to one of their major members, while IGNORING the many others who were kicked in the balls by it. I have argued with their representatives who come solicit at my office on this. The fact that with each new trade deal, our deficit only gets larger they have NO defense other than to suggest that with more of MY support, who knows, maybe I could get one of those deals.
This is how it works…. corruption. You get the good deal at someone else’s expense….until eventually, when someone else’s deal comes at your expense and you have nothing to defend yourself with. We are being bought off with cheap goods while pretending someone else will cover the cost. We watch as our neighbors lose their jobs, our industries fade and we tell ourselves that would never happen to us. We watch as massive debt is created to fund job eliminating technology while we are encouraged to believe this will remove our burden of employment, of WORK, and provide liberty and leisure while completely ignoring the fact that WE own none of it…. except the burden of incredible debt.
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I suspect President Trump will have a little more than “The Farm Lobby” to worry about over the coming months comrade:
https://www.sutori.com/story/trump-russia
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Frankenfood manufacturers will get to export less of their poison.
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These trade deals are American wolves in sheep’s clothing. Because of subsidies, American corn can be sold in Mexico cheaper than it’s local cost. This ruination is why there was a surge of immigration north, and only now being reversed. Venezuela let its own agricultural industry wither, but now dollars are scarce and expensive, they have no local agricultural industry to feed themselves.
They didn’t see it coming and are paying the price!
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Like NAFTA or ANY trade agreement had anything to do with one of the most fertile countries in the world not being able to feed itself. Maybe it has something to do with having hard line Marxists in power/government dictating to Venezuelan farmers:
1. What they can grow/raise
2. What price they can then sell it for
3. Taking productive farmland from “enemies of the people” and giving it to cronies
It withered because the people who Bernie thought were heroes made it wither…
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Venezuela let its own agricultural industry wither, but now dollars are scarce and expensive, they have no local agricultural industry to feed themselves.
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Yep. Keep calling anyone who tries to make a profit “evil” and eventually you get Venezuela.
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Agree, this is very much all a distraction, the trade deals with S. America basically sideline local agriculture for intensive farming, big agro, US exports. Bolivia another one where legislation pushed out the small holders. Tipping it in favour of US is maybe just another way of saying making a crooked setup pay more, or just a trivial adjustment.
With Mexico all that happens if you move the farming to the US is the labour follows, so the whole adjustment is just control of the sector, influence and reassigning profit. Maybe would be better if US restrained its agro adventures in S. America anyway, too much corruption for it not to reward the corrupt.
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I thought Bolivia only produced Cocaine and really ugly people who wear ridiculous hats.
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Maybe some justification in the stereotype, but I expect Bolivians could think of a mutual reply of some kind.
Apparently a large part of the local economy got messed up by new legislation designed to favour ‘standards’, forced many low scale producers out of the market… have read authors I trust describe the direction…not been there to witness it myself.
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Once the trade BS stops (like Canada moving milk cheaper) we might eventually have free trade. I have an idea-buy your own country’s products for now and see how that goes.
It might work.
On a side note, I don’t know if the Ford CEO was bribed to move the plant to China, but I sure hope they sell a lot of cars to the Chinese, because a lot of Americans aren’t going to make the Ford Focus (or maybe any Ford) their next car. Mexico shouldn’t buy Ford either, because they screwed us both over.
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I will never buy a car built in China, but what’s the difference between that and a car built in Japan or Germany? Because Japan’s central bank spends trillions to keep the Yen weak, and Germany relies on a weak Euro, there is no such thing as “free trade.” There’s only the U.S. giving up industry after industry, while other countries use every means possible to create jobs in their own countries.
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A car built in Germany or Japan has a decent likelihood of working perfectly for several years. A car built in China will have a 50% failure rate. That’s the difference.
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The US is “giving up” industry, because for every dollar industry creates, 90 cents goes to ambulance chasers, banksters, bureaucrats, public unions, rent seeking “property owners” hiding behind zoning laws to drive up rents, and other leeches who produce nothing, yet live well.
Other countries mostly aren’t all that either, but the productive-to leech ratio is rarely nearly as dismal as in the US.
The only value-add a country has in a given year, is that which is produced by people actually doing productive work. Living off trying to redistribute that which others create, whether via taxes, money printing, lawsuits, regulations, mandatory spending, preventing others from building something that can compete with what you have blah, blah, produces exactly nothing. Nada, zip, zilch. America would, literally, be better off if all those involved in the above, were handed over to Isis for public beheading with dull knives. Yet, those are the clowns making out like robber barons, in the current American Dystopia. With the, entirely predictable, result that the costs of supporting them in splendor, leaves productive US business less competitive. And that fewer and fewer Americans see any reason to do anything productive, since getting in on the rackets, is obviously the way to “make it” these days.
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Farm products are only 8% of US exports to Mexico. I see your red herring. What’s for lunch?
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1% of the workforce is in agriculture. Big ag is highly subsidized. Other countries are dependent on us for their food but can’t afford to pay for it so we send them international welfare to them along. Oh, and because food is so cheap in the US we’re all fat and use food as entertainment.
And the second someone brings up the idea of weaning big ag off the teat they just point out that Iowa is (for completely unknown reasons) a critical primary state. Oh, I know, because every other ad (the ones that aren’t pharmaceutical ads) is for some restaurant or packaged food. Newspapers still get a ton of ad revenue from the supermarkets’ weekly inserts. And gas station profits are in the food, not in the gas.
End the farming subsidies, let local farmers in other countries produce for that country and a lot of our health issues, sloth issues and political problems will go away. But it will be another nail in the coffin for the media companies.
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This is the challenge for any party in power. If you pass a law that helps 10,000,000 save $50/year, but costs 1,000 $500/year you get no thanks from the 10,000,000 but dog’s abuse from the 1,000. And they feel the pain every year while the 10,000,000 internalize the savings.
When you try to reverse the law, you piss of 10,000,000 and you know your opposition is going to remind them repeatedly just before the next election.
Add a clown show into this mix that adds to the visibility and you have a real dilemma:
“It is impossible to predict what Trump will do. He may even flip-flop multiple times at the last second.”
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“The winners never remember and the losers never forget.” — Sen. Elliott Dirksen, on why he usually voted with the losers
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The best way to attract business or keep companies from moving are to lower the corporate tax rate and lower the massive regulatory burden. This should make us competitive. Then allow free market capitalism to work. Automation also may actually help keep companies here as it lowers labor costs. In theory those lost jobs will be shifted to higher skilled and higher paying jobs. This has always happened in the past and there is no reason it won’t happen again. The main obstacle to allowing free market capitalism (not the corrupt crony capitalism we now have) is the Government.
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“But for U.S. farmers the 23-year old pact secures access to stable, lucrative markets in Mexico and Canada that now account for over a quarter of U.S. farm exports.”
…
Farmers are gonna b!tch and moan about NAFTA? Want to keep markets “free”? Well, for starters agree to give up The Great Depression era “temporary” farm subsidies. As a taxpayer, I would welcome it.
Probably THE primary reason Iowa fights to keep its caucus first in presidential primaries. A steady parade of POTUS candidates come to Iowa to pander … and get the much needed leg up winning the caucus would deliver. Pandering, of course, is to assure Iowans the farm welfare will remain intact.
A few years ago when Jon Huntsman was running for POTUS he didn’t bother to campaign in Iowa since he was against the subsidies. Of course, he was out of the race early.
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“And it will not save a single job.”
…
You say that repeatedly.
Is that just your opinion? … or do you have proof that you can share with the rest of us?
Because no matter how many times you say it – I’M NOT BUYING IT.
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“A genuine free trade agreement would be a win win win affair, but sadly that will never happen.”
If it would be win win, everyone would want a genuine free trade agreement.
I watched TV a significant amount of TV production move from Hollywood to Vancouver, because of the exchange rate, which cost a number of L.A. workers their jobs. The first season of original McGyver was shot locally. The rest of the series was shot in Vancouver.
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Always a good laugh for natives.
X-Files was shot in Vancouver. In one episode they were driving on a road in a county next to mine (mid Atlantic) … damn, didn’t know we had tall pacific northwest fir trees around in such abundance ….
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Our society is so heavily government subsidized that if we remove them, immediate collapse would result. Other industrialized nations are the same. Free trade is not possible with subsidies. The west is on a fast track toward financial collapse and nothing can stop it.
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No mention of self driving robots?!?!?!?
Maybe our blog host doesn’t like Trump, but its basic game theory that the government’s ability to collect any taxes will crumble if they endorse illegal immigration. Sooner or later (probably sooner), that reality will finish off California’s government for good.
Putting aside the utter stupidity of a country that doesn’t enforce its own borders, I can’t believe our blog host failed to mention the obvious solution to illegal immigrants working on farms while not paying taxes like everyone else.
The German industrial Bosch has developed robots that drive around a farmer’s field (self propelled, self driving, etc). They run on batteries and solar (same sun that powers the crops). The robots straddle rows of plants, spray pesticides right on the plant — which reduces pesticide use (safer and lower cost). The robots inject herbicide straight into the roots of nearby weeds (the robots us AI to distinguish crops from weeds). And while they are at it, the robots measure soil moisture and can direct soaker hoses to direct water to the places that need it — reducing water usage and water runoff. And they are robots with no worries about immigration and customs, no need for wages or health care or housing or police.
https://www.deepfield-robotics.com/en/Weeding.html
And if you really want to up your crop yields without giving up city life — the Japanese went another step further, building a hydroponic farm that is tended to by robots.
https://www.theguardian.com/environment/2016/feb/01/japanese-firm-to-open-worlds-first-robot-run-farm
Given the shortages of potable water all over the world, given the illegal immigration problems, given that farming hasn’t had a technological disruption in 100 years, and given this technology already exists and is in use — its hard to think these robots aren’t at least as likely (if not more so) than self driving cars.
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Nice to see you promoting autonomous tech Medex. The countries that embrace it will create more jobs than countries who fight it!
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What jobs? Can you name them? Can you imagine them?
Salesmen….?.. we always need more salesmen, except for Amazon.
Robot service technition? Surely autonomus robots will have autonomus service robots.
Sorry but I’m just not seeing them.
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Sure I can. For example, if China becomes the world leader in designing and building autonomous vehicles, then sells them to the US, while the US doesn’t participate in that industry, then who gets the jobs. China. What part of that don’t you understand?
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There is trade, which is what has always occurred, or free trade (where there is no protectionism or subsidies of any kind and labour is allowed to move freely) which has never occurred. Since NAFTA is supposed to be a free trade agreement, and it is not, it should be scrapped.
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I agree with Mish on trade. I also agree when he tries to get people to “please think”. Sadly, there are many who simply cannot think.
There are many on this site who seem to believe that America can “win” A trade war. It seems Trump believes that as well.
The US, has a population of 320 million. The world is 7.5 billion. If you cut America off from trade, you are limiting American companies to selling only to Americans. If you want to see mass unemployment in America, then just start a trade war.
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Mexico played America like a fiddle post NAFTA because dirty politicians on the take allowed them to get away with it.
I’m on Trump’s side. TIme to reverse course and stick it to Mexico for once. I’m fed up with Mexico sending all their unwanted illiterate indigents across the border for us to sustain while their keep their most productive citizens. Enough already. Time to fight back.
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