Grand Forks Herald | By Mikkel Pates | April 6, 2004 The
North American Free Trade Agreement is 10 years old.
That's something for agriculture to note - even celebrate - but the free trade agreement and others like it have been oversold, said Gene Hugoson, Minnesota commissioner of agriculture.
"It's not a cure-all," Hugoson said. "It's one of the tools for agriculture to add value to their products; it's certainly not the only one."
Hugoson, who has held his post since 1995 and under three governors, was a speaker and panelist at a recent conference titled "NAFTA@10," a review of one of the most controversial pacts. Several panelists were asked to assess NAFTA's impact in areas ranging from grains to livestock.
The conference, cosponsored by the Canadian Consulate, the Minnesota Agri-Growth Council and the University of Minnesota, focused mostly on NAFTA's U.S.-Canadian impacts.
"Yes, it's not perfect," Hugoson said. "Yes, there are things we need to do to improve and improve it, but it's an example of what can happen when you have three countries that have dedicated themselves to improve the means of getting products back and forth across the border." 420 million winners?
NAFTA, completed in 1994, has created a continental market of 420 million consumers in Canada, the United States and Mexico.
"We have gained from increased efficiency, increased jobs and increased income," declares Mark Wartman, Saskatchewan's new minister of Agriculture, Food and Rural Revitalization, calling NAFTA a "step in the right direction" for all three countries involved.
Despite chronic concerns over Canadian access to the U.S. spring wheat and durum markets, and the effect of the Mexican import-export rules on U.S. sugar and corn sweetener markets, most in the seminar focused on what they consider a win-win-win situation, he said.
Canadian Consul General Christopher Thomson said the U.S.-Canada connection is huge. Cross-border trade with the United States in 2002 was $445 billion - about $1.3 billion a day.
In 1989, U.S. ag exports to Canada were $2.9 billion, while ag imports from Canada were $2.2 billion for two-way trade of $5.1 billion. In 2002, U.S. ag exports to Canada were about $8.7 billion, while imports were $10.3 billion, for combined two-way trade of $19.3 billion.
U.S. ag exports to Canada during that period grew by 288 percent, while ag exports to the rest of the world grew by only 18 percent, Wartman said.
How much of the increase is because of NAFTA is not calculated, but proponents say it's an underlying factor.
"The increased integration of North American Agriculture has led to increased efficiency and increased our international competitiveness," Wartman said. "At the same time, integrated North American markets have led to lower prices for consumers and increased consumer choices."
Former Michigan Gov. James Blanchard, a U.S. ambassador to Canada from 1993 to 1996, said Canadians pay more attention to the U.S. situation than the other way around because "they are so dependent on trade - and us."
Rep. Mark Kennedy, R-Minn., said it's a "fallacy" that trade is a zero-sum game - that one country's gain is another's loss.
"When we each do what we do best - for each other - we are all better off," he said.
He said facts on trade are distorted in the press, noting the number of in-sourced jobs has grown at twice the rate of out-sourced jobs in the past five years. He said China has lost a higher percentage of its manufacturing jobs in the past 10 years than America has.
Despite his free trader mentality, Kennedy said sugar is one of our most challenging issues to work with and that it must be attacked globally instead of through bilateral deals.
Isolationist policies will lead to retaliation that will, in turn, cost American business and jobs, Kennedy said.
"Let us not just embrace NAFTA as a success, but stay on the offense to seek the next chapter of reaping the benefits from trade." Living history
Hugoson and others say they're growing concerned about the 2004 political debates in which "protectionist and isolationist mentalities" have re-emerged.
"The fact remains, unless we do have trade, and as unencumbered as possible, we certainly are going to have some real problems down the road," Hugoson said.
David Bradley, chief executive officer of the Canadian Trucking Alliance, said the picture is changing again, as U.S. anti-terrorism safeguards are put in place at the borders.
Bradley notes that any impediment causes a "question mark" on the long-term viability of that trade, which reduces investments.
Hugh Maginnis, U.S. agricultural attache to Canada and a Minnesota native, said the Bush administration is creating competition by making bilateral and multilateral agreements in the absence of larger deals in the World Trade Organization.
"Countries are now knocking at our door, asking for free trade agreements," he said, adding the plan is to create a "force of momentum that lasts far beyond this administration."
But Ralph Kaehler, a livestock producer in St. Charles, Minn., chides Maginnis for the administration's enthusiasm for FTAs with Jordan and Vietnam while refusing to ease restrictions on Cuban trade.
"Can you explain the logic of that?" Kaehler said.
Maginnis said Kaehler has a "very good point" and that critics have problems with the "foreign policy of Cuba."
"While I'm hopeful, from an unofficial standpoint, that that's going to change, obviously agriculture is really wanting to get in there and open up the markets," Maginnis said.
He said political realities that Republicans and Democrats both have to deal with - "the center of political power located in southern Florida" - is "one reason we haven't moved forward with an agreement with Cuba."
Similarly, political realities in the Northern Plains can drive administration decisions such as anti-dumping cases.
"You have a very influential group of farmers in North Dakota, for example, and are vehemently anti-(Canadian) Wheat Board," Maginnis said. "These are groups, constituencies we have to deal with and senators from these states as well. Until we all get together and bring it to the table in Geneva and get a good WTO agreement and clear these things off on a multilateral as well as bilateral basis, they're going to go on." Wheat Board
The Canadian Wheat Board continues to defend itself against challenges by U.S. producers. Wartman said these antidumping and countervail rules "are allowed to unfairly disrupt trade in North American Agricultural markets." He criticizes NAFTA for failing to include dispute resolutions, other than unilateral action.
Anti-dumping rules were designed to keep corporations from muscling out competition, Wartman said.
"Clearly this argument doesn't fit in the agricultural sector, where we have large numbers of small producers producing and competing based on international prices.
"The current anti-dumping rules do not take into account the cyclical nature of agriculture," he said. "There will always be times when it can be claimed that producers are selling below their own cost of production, but it's probably a cycle in the market."
Wartman said anti-dumping investigations do not consider whether the domestic producers also are selling below costs, "which will be the case in integrated markets such as what we have in North America."
"A rancher simply cannot place his cattle in storage until he receives the prices he desires," he said.
Meanwhile, Saskatchewan farmers complain that the investigations don't take into account the "level and types of subsidies that are received by the complaining party."Grand Forks Herald:
