As a corn, soybean, and cattle farmer, as well as an owner of a multigeneration family-owned seed company in Bellevue, Iowa, I can attest to the incredible growth that the North American Free Trade Agreement has provided to farmers throughout the United States. Since NAFTA went into effect in 1994, American agricultural exports to Canada and Mexico have more than quadrupled, with just last year totaling $39.7 billion in products sent to the two countries.
While NAFTA has done great things during its more than 20 years of existence, it is in need of some updates so that farmers can continue to compete with emerging global competitors across the border and overseas. This is why farmers in Iowa and elsewhere need a “new-and-improved NAFTA” called the United States-Mexico-Canada Agreement.
This agreement was negotiated by the three countries to build upon our already fruitful trade with Mexico and Canada.
The economic benefit numbers for USMCA speak for themselves. According to an International Trade Commission analysis, the USMCA will create 176,000 jobs and inject more than $68 billion into the economy by increasing exports to Mexico and Canada. U.S. agricultural exports alone will increase by $2.2 billion under the new agreement, including an expansion in market access which will boost exports by $435 million.
The updates needed include a number of modernizations in USMCA that expand our markets and will allow us to compete into the future. They include strengthening science-based sanitary and phytosanitary regulations, providing strong intellectual property protections and stronger support for biotechnology and the trait approval process. It also opens up Canadian markets for U.S. dairy farmers, and lays the groundwork for critical trade deals we can make with Japan and the European Union in the future.
The clear consensus among American farmers of all stripes is the need to support this trade deal, and for good reason. The American Farm Bureau released a statement calling the USMCA an “upgrade” from NAFTA and that without it, “Our most critical markets hang in the balance.” Here in Iowa, where Canada and Mexico are our No. 1 and No. 2 export destinations and receive over $6 billion of our goods annually, the USMCA will be crucial to our livelihood.
Jim Greif, vice president of the Iowa Corn Growers Association wrote in an editorial that “the USMCA would give the producers of Iowa the groundwork needed to expand their operations and secure key markets for exports in years to come.” And Gov. Kim Reynolds remarked that “strengthening trade provides more certainty to our Iowa farmers and the agribusiness sector.”
There were nearly 100,000 Iowa jobs supported directly by exports in 2016, which typically pay 18 percent more than equivalent domestic jobs. According to research by Dr. Gary Hufbauer and the Peterson Institute for International Economics, three out of four of Iowa’s congressional districts are particularly dependent on trade with Canada.
Iowa’s 2nd District is ranked 48 out of 80 top congressional districts in exports to Canada as a percentage, 12%, of the district’s employee payroll. Iowa’s 4th and 1st districts are close behind at 10.7% and 9.8%, respectively.
NAFTA has been integral for Iowa’s economy, and USMCA will ensure that these districts and their constituents will continue to be financially supported in the long run.
The time is now for the USMCA to be approved. Farmers of all products not just in Iowa, but across the United States, want Congress to put political differences aside and deliver a much-needed win for American agriculture and the future of our economy.