Currently, the Trump Administration is in the “midst of renegotiating the free trade deal with Canada and Mexico”, which is known by both academia and policymakers as the North American Free Trade Agreement, or NAFTA. Likewise, the reason why this is big is because throughout his campaign Trump made his views of the whole deal very visible and blatant.
The view that Trump and many of his Administration members have of the deal are: One its one if not the worst deals, which the United States has ever made. Another is the deal has in affect taken millions of United States manufacturing jobs. Furthermore, the announcement of the renegotiations has made much of the agricultural sector anxious.
The United States agricultural sector must look to foreign markets. The main reason for the outward looking is because 96% of the globes population exists outside of the United States. Therefore, it’s no surprise that Canada and Mexico are two of the principal markets for much of the U.S farmers.
Further analysis demonstrates that Mexico is the top buyer for corn grown in the United States. Consequently, numerous farmers became alarmed when Trump criticized NAFTA, which has opened doors for the United States corn producers into both the Canadian and Mexican markets. Additionally, Chad Bown, a trade expert for the Peterson Institute for International Economics, stated that “”It’s inevitable that agriculture will suffer collateral damage if the NAFTA agreement is terminated …”
NAFTA is not only beneficial for the farmers of America, but the deal is also an essential part of the beef industry. The reason why the trade deal is an essential part of the beef industry is that the deal essentially adds approximately 300 dollars to each beef animal that ranchers in America have. This is best described by Julie Ellingson, executive vice president of the North Dakota Stockmen’s Association in Fargo, who stated, “beef exports add about $300, on average, to the price of each beef animal. And she says, “that is real dollars and cents to the farmers and ranchers across North Dakota.”
Furthermore, foreign market for American beef is essential because many of the countries, especially Mexico help in reducing the waste of the beef industry because they value the less desirable cuts of meat such as the tongue, liver and kidneys, which are not that highly prized in the United States.
Consequently, the U.S Beef industry enjoys a huge influx of cash flow from both Canada and Mexico because of the virtual elimination of trade barriers, which NAFTA had achieved. Therefore, many farmers and ranchers are hoping that the Trump Administration holds true to its word, which was that the agricultural sector would not be affected by the renegotiations of NAFTA. However, many farmers and ranchers are still nervous to see the outcome of the renegotiation of NAFTA. Due to the many benefits that NAFTA had provided them. Consequently, as the old adage goes “only time will tell.”