Whenever news trickles out about the fate of the North American Free Trade Agreement, more numbers always seem to follow, underscoring the trade pact’s necessity for Nebraska.
The latest detail comes from the Nebraska Farm Bureau, which recently released a report on the agreement’s impact on agriculture. Canada and Mexico, the two other participants, have become the state’s leading trade partners, accounting for $2.96 billion in agricultural exports, 45 percent of Nebraska’s total, in 2016.
As the Farm Bureau report correctly noted: “Any way you measure it, Mexico and Canada are critically important customers for Nebraska agriculture.”
That’s why it’s imperative the Trump administration preserve this deal, or at least certain provisions critical to farmers and ranchers, lest they face even more significant financial hurdles going forward. Already, those key trade partners have begun testing the waters in other overseas markets should this stream of Midwestern bounty dry up.
Yes, we’ve been banging the drum on this topic for more than a year now, ever since President Donald Trump floated withdrawing from the pact as a negotiating tactic. That’s because NAFTA is of the utmost importance to the state’s leading industry, which is already suffering a downturn.
Now that we have a price tag on the impact of a potential exit, it’s time to sound the alarm louder than ever.
The estimated $2.96 billion hit just represents agricultural exports, but that figure still exceeds the Gross Domestic Product of 27 countries, according to World Bank statistics from 2016. For comparison, Nebraska has a budget of slightly more than $9 billion this year.
Nebraska farmers and ranchers are relatively fortunate that not all of their eggs are in that particular basket, given the trade deal’s murky future. Nineteen other states exceed the state’s 45 percent of 2016 agricultural exports to Canada and Mexico.
But only four states – California, Iowa, Minnesota and North Dakota – had farm and ranch exports to NAFTA compatriots exceeding $3 billion last year. Without $2.96 billion of agricultural exports to those two countries, Nebraska’s $2.8 billion trade surplus in all industries would have shriveled to a deficit.
Free trade agreements have been one of the best developments to increase economies globally. A rising tide indeed lifts all boats, including those in Nebraska. Forty-nine of Nebraska’s 93 counties received exported than $10 million in farm goods via NAFTA last year, while farms in 84 counties averaged more than $10,000 in 2016 sales to Canada and Mexico.
Easy access to North American markets is vital for the economic success of agriculture, which is felt by all Nebraskans urban and rural. This latest report further highlights and specifies the negative impact a NAFTA withdrawal would have on this state.
—Journal Star, Dec. 8, 2017