Legal Insight. Business Instinct.

Free Trade

Lance J. Schuster

Exports of agricultural products are a big part of Idaho’s economy. In the most recent marketing year Idaho exports of potatoes and potato products totaled 1.4 billion dollars. Other exports include things like dairy products, vegetables, and fruits. Idaho also exports a significant amount of alfalfa hay.

Agricultural exports are also important nationally. Last year the United States exported $140 billion in agricultural products. As a country we had a trade surplus of more than 21 billion dollars.

The two biggest trading partners for the United States are Canada and Mexico. Trade with our two neighbors is governed by the North American Free Trade Agreement (“NAFTA”).

NAFTA has benefited Idaho farmers and ranchers by providing lower tariffs to agricultural products that are shipped to Canada and Mexico. Since NAFTA was implemented in 1994 agricultural exports from the United States to Canada and Mexico have increased by 300%. Without NAFTA Idaho products would be subject to higher tariffs, resulting in lost sales.

The United States is currently in negotiations with Canada and Mexico over NAFTA. A deal is far from guaranteed as the United States, Canada, and Mexico squabble over the 24-year-old agreement. President Trump has threatened to withdraw from NAFTA unless the trade pact can be renegotiated with more favorable terms for the United States. President Trump has been critical of NAFTA as it has incentivized some industries, such as the auto industry, to move manufacturing jobs to Mexico. Trump’s criticism ignores the benefits that NAFTA has provided to agriculture.

A trade agreement with Canada and Mexico is critical to Idaho agriculture. Free trade fuels Idaho’s economy, and provides a market for agricultural exports from Idaho and the United States.

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