• WisBusiness

Farmers push for change amid heated trade talks
6/14/2018

Some Wisconsin farmers are stressing the importance of remaining in NAFTA as tensions mount in ongoing trade talks.


But others say the current system of trade policies needs fundamental change, as producers struggle with oversupply and an inability to make some goods as cheaply as other parts of the world.


“Our current approach to trade is not serving farmers well,” said Darin Von Ruden, president of the Wisconsin Farmers Union. “With over 20 percent of U.S. agricultural output headed for international markets, farmers have become vulnerable to factors over which they have no control, such as exchange rates or trade wars with other countries.”


“U.S. farmers cannot afford to see NAFTA terminated, but the agreement should be restructured,” said Michael Slattery, a produce and livestock farmer in Manitowoc County. “NAFTA and other ‘free’ trade agreements encourage excess production based on the false premise that we can export our way to agricultural prosperity.”


Slattery says NAFTA doesn’t address the fundamental problem of overproduction, and argues supply management programs for U.S. dairy, grains and meat “would stabilize and improve farmers’ bottom line.”


These comments come in the wake of heated negotiations between the United States and Canada, in which President Trump and Prime Minister Trudeau traded barbs and threats of further action after the United States imposed tariffs on Canada and other close trade allies.


Wisconsin Manufacturers and Commerce and the Ontario Chamber of Commerce recently issued a joint statement in support of free trade and NAFTA.


“Wisconsin is home to manufacturers, food processors and farmers,” said WMC President & CEO Kurt Bauer. “All of these industries, and others, are supported by free trade, which creates billions of dollars in economic output and family-supporting careers throughout our state.”


David Newby, president of the Wisconsin Fair Trade Coalition, says focusing exclusively on the benefits of increased exports only provides half of the picture.


"Again and again, free-trade proponents repeat the same half-true statistics about how exports have increased under NAFTA,” Newby said. “But what about imports? True, higher exports mean more sales for agribusiness corporations, but at the same time, increased imports equal the loss of domestic markets for farmers.”


Newby says the only measure that matters is the balance of trade -- exports minus imports.


“When we include both sides of the ledger, the numbers are much less rosy,” Newby said.


He says the most recent data show Wisconsin’s state-specific agricultural trade deficit with Canada and Mexico was $12.6 million in 2016.


“Looking at the full picture, Wisconsin is losing out,” Newby added.


Tony Schultz, a producer of vegetables, beef and maple syrup at his Athens farm, says “trade is a two-way street.”


He says imports of fresh produce have only gone up since the passage of NAFTA, leading to a $11.4 billion trade deficit in fruits and vegetables in 2015.


“My customers can go to the grocery store and buy tomatoes or lettuce or cucumbers from Mexico for a fraction of what it costs me to produce the same crop in the United States,” Schultz said. “I’m all for competition, if the competition is fair.  But the minimum wage in Mexico is $3.86 per day. How can I compete with that wage as an employer? And why would I even want to try?”


To boost rural prosperity, he says the strategy “should be to build the local economy up, rather than trying to pay the lowest wages on the continent.”


--By Alex Moe
WisBusiness.com
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