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“The World Isn’t Going to Wait for Us,” Panelist Says of U.S. Trade
Regulations and tariffs must be as limited as possible, and trade negotiations are wildly important to the future of U.S. and North American trade, according to four panelists discussing trade and manufacturing at the 2017 Iowa Ag Summit on Saturday.
“95% of our consumers are outside of North America. They’re going to need our product,” says Fred Gorrell, assistant deputy minister of Agriculture & Agri-Food Canada. “For me, it’s how do we take care of all the other stuff (regulation, agreements) because the demand is going to need our product.”
Trade Agreement Trials, Importance
For John Deere’s Jim Field, any type of lateral trade agreement would be welcome. His belief is that the U.S. should leverage the successes of the North American Free Trade Agreement (NAFTA) when moving forward with other trade agreements.
“We just need to get moving,” says Vermeer Corporation’s Mark Core. “The reality is, the world isn’t going to wait for us to recalibrate or calibrate in general how trade needs to happen.”
Senator Charles Grassley (R-IA) agrees with that sense of urgency. In comments made earlier on Saturday, he stated that he was proud of Congress for rolling back poor Obama-era regulations, but that’s about it in terms of what he’s happy to report. “I’m kind of embarrassed to talk about regulation ... so far this year, we’ve had a poor track record,” he says.
Grassley stressed that he has communicated the importance of NAFTA to agriculture and will continue to do so going forward. To get his message to President Trump, Grassley has been working with the administration’s new secretary of commerce, trade representative, and Trump’s trade adviser to make his voice heard before the NAFTA negotiations start up with Mexico and Canada on August 16 in Washington, D.C.
“I think it’s an opportunity for our three countries to show the rest of the world how we can work together,” says Gorrell of Canada of the upcoming formal negotiations. “North America is the envy of the world for how we do trade.”
Mexico is an important market for the U.S. pork industry, which means the National Pork Producers are being as defensive of NAFTA as possible. Without NAFTA, Randy Spronk of the National Pork Producers says the industry is facing some substantial burdens.
“Pork wants a trade agreement with Japan,” says Spronk. However, Spronk says China is the highest potential customer for the industry with its substantial population growth and growing middle class.
“Clearly, to the producers in this room, China will be an important segment that we’ll need to participate in,” says Field. Panelists expressed concern over China’s need for control, but Core praised President Trump’s choice of former Iowa Governor Terry Branstad as the new U.S. ambassador to China.
Vermeer has pulled out of almost all of its investments in Mexico because of regulatory burdens, although the company would like to participate in that market. “We’ve got fewer people working in Pella based on our inability to manage through that tariff.”
For John Deere, Field says tariff areas, regulatory requirements, protection of intellectual property, and administrative burdens affect each decision the company makes to expand into new markets. The burdens facing companies and producers could knock the U.S. out in competitiveness, Field says.
“There are a lot of costs that occur from the farm gate to the Golden Gate,” says Field of the infrastructure issues the U.S. faces in just getting commodities to the ports for export. There are regulatory hardships facing U.S. companies and farmers abroad, but Field argues that there are also issues within our own border.
Core made it clear that in order to be competitive, production costs must be as balanced and minimized as possible.
For pork producers in particular, immigration laws that are critical to helping operations stay afloat are being closely watched.
“Immigration is very important to pork,” says Spronk, who has immigrants working on his own swine operations.
For Vermeer’s Core, though, he believes changes need to happen not just in rural but all areas of Iowa to keep employees happy and thriving in the communities they work in. Investing in rural broadband, keeping community schools vibrant, and so on.
“The human capital thing is a big, big deal,” says Core. “At Vermeer, we’re starting kids at ages 3 through 5 in daycare that’s really the Yellow Iron Academy. They start learning about STEM-type activities, and it just continues as they go through school.”
Core cited 2016 presidential candidate Sen. Marco Rubio’s idea of getting certificates in the hands of high school students upon graduation to give them an incentive to start making money right away and a leg up on those in other careers.
According to Field, there are 300,000 to 350,000 unfilled positions in the U.S. manufacturing sector today. Extra hands, especially trained ones, are needed.
“We’re closer today than we were five years ago in terms of encouraging good young people to take the career path of working with their hands,” says Core.