Top U.S., Canadian and Mexican trade officials were once again at the negotiating table last week in Washington in hopes of hammering out a new deal on the North American Free Trade Agreement.
In light of today’s contentious trade climate with China, rural America needs certainty that all the benefits of NAFTA will continue for years to come.
Recently, U.S. Secretary of Commerce Wilbur Ross commented that, “either we get a [NAFTA] deal done in two weeks, or not until fall. And who knows what happens then.”
Uncertainty around NAFTA’s future and the timeline under which any changes will take place is hurting America’s farmers, ranchers and the retailers who support rural America.
By growing our markets in Mexico and Canada, NAFTA has led to lower prices on everyday goods from televisions to T-shirts and turnips. Unfortunately, the American families who count on these lower prices at the checkout counter will ultimately pay the price were the United States to withdraw from NAFTA. Tariffs would lead to a $5.3 billion increase in consumer costs, reduce corporate revenue by $10.5 billion and disrupt supply lines that would reverberate across wide swaths of America’s industrial sectors. Rising prices would slash disposable incomes for families and cost 128 thousand jobs in the retail sector alone.
But nobody would feel the impact of a NAFTA withdrawal more than America’s farmers and ranchers. Tariffs on American food and agriculture products would stifle exports and lead to a drop of $13 billion in gross domestic product for the farm sector and potential loss of 50,000 agricultural jobs. As farmers head into the growing season and start to make important financial decisions that impact the success of their business, a withdrawal from NAFTA would spell disaster for rural communities already in crisis.
NAFTA has been an engine of economic growth. Since its implementation, exports from the United States to Mexico and Canada have increased by 450 percent, and the two countries import more than one-third of US merchandise. Annually, the U.S. economy earns more than $127 billion from the revenue generated from NAFTA trade. And those benefits help hard-working families, who gain a $10,000 bump in their annual income s from free trade deals like NAFTA.
Further, in 2016 alone, America exported more than $43 billion in home-grown food and agriculture products to our NAFTA partners, helping to support 43 million food and agriculture workers.
American families benefit from affordable consumer goods and millions of retail jobs are supported from the revenue generated from trade; not just food, but a wide array of consumer products benefit from the “tariff-free trade zone” NAFTA protects, including electronics and appliances, food and beverage, household goods, automotive parts, apparel and textiles and pharmaceuticals.
The April jobs report helps shed light on the positive forces driving financial relief that responsible economic and tax policies have generated for American families. President Trump is focused on his commitment to strengthen the country’s economy and put America First. But job growth and wage increases remain fragile; millions of families still live paycheck-to-paycheck and the economic growth that the country is currently enjoying is not guaranteed.
Americans depend on trade to import affordable, quality products, and enhance job growth and consumer spending power. NAFTA is critical to the continuing growth of American agriculture and the American economy as a whole. Free trade that empowers domestic consumers and opens markets to American exports is the best way to ensure that growth. Millions of Americans rely on a thriving trade agenda to ensure a better future for their children and the communities in which they live. America’s farmers and retailers need NAFTA and moving forward with the trade agreement bolsters the American dream, from sea to shining sea and across all the fruited plains in between.
Editor’s Note: The above guest column first appeared in Business Insider magazine.