29 February, 2008 - Candidates, Get Your NAFTA Facts Straight

It is certainly no surprise to me that agriculture gets little, if any, mention in any of the presidential debates leading up to the 2008 election. That has been the case now for several elections as campaign advisors tell the candidates that farmers and ranchers make up only 2% of the population; forgetting that agriculture provides a living for about 21% of the work- force in this country. Be that as it may, I think it is short-sighted on their part, but that is the reality of life.

Now, though, the Democratic candidates are indirectly bringing agriculture into the campaign with their criticism of trade agreements, particularly NAFTA, the North American Free Trade Agreement that was put into place January1st, 1994 with the strong support of President Bill Clinton. The candidates are attacking each other for supporting NAFTA and suggesting the U.S. should withdraw from the agreement, saying it has been a bad deal for America and blaming it for the outsourcing of millions of U. S. jobs. Well, I disagree. It has been a very good deal for America’s agricultural community, and for the nation as a whole and I suggest the candidates look at the facts.

From 1993 to 2005, trade among the NAFTA nations, that’s Canada, the United States and Mexico, climbed 173%. Each day, the NAFTA countries conduct nearly 2.2-billion dollars worth of tri-lateral trade. U.S. merchandise exports to NAFTA partners grew more rapidly, at 133%, than our exports to the rest of the world, at 77%. For agriculture, Canada and Mexico alone account for 55% of the increase in U.S. agricultural exports to the world since NAFTA began in 1993 and currently, Canada is our No. 1 agricultural customer and Mexico ranks No. 2.

That doesn’t look like a bad trade agreement to me. In any trade agreement, some segments of industry and agriculture are hurt by foreign competition, but that is part of trade. As my friend, Dean Kleckner says "If it doesn’t go both ways, it’s not trade."

As to the candidate’s argument that NAFTA is the cause of out-sourcing of American jobs, again I disagree. I think out-sourcing began in the ‘70's when Japan started exporting cars and electronics to the United States... and we bought them. That meant fewer American-made cars and TV sets were sold and those industries lost jobs to Japanese workers. Then U.S. companies, responding to shareholder demands for higher returns, moved factories to countries with cheaper labor to improve their profit picture.

I maintain that NAFTA has been good for the U.S. and its trading partners and any suggestion to opt out of the agreement is a bad idea!

My thoughts on Samuelson Sez.