Joni Ernst, Chuck Grassley, and Iowa Republican leaders voice support for new NAFTA agreement
After President Trump announced a renegotiated trade deal among the U.S., Mexico, and Canada, Iowa Republicans line up to praise the negotiations, though disputes with China still loom.
Glen Stubbe/Minneapolis Star Tribune/TNS
President Donald Trump attends a rally on Thursday, Oct. 4, 2018, at Mayo Civic Center in Rochester, Minn.
October 5, 2018
Iowa GOP politicians are pleased with President Trump’s completion of trade talks with Mexico and Canada, saying it will open up trade for Iowa’s agriculture market.
“It shows the president can match his actions with his talk,” said Sen. Chuck Grassley, R-Iowa, in a Wednesday press call with reporters.
He said it will be beneficial to farmers who were previously anxious about trade with Canada and Mexico.
The new NAFTA negotiation, now called the U.S.-Mexico-Canada Agreement, will open up the Canadian market to wheat, dairy, poultry, and eggs.
Canada is the top trading partner of Iowa, leading in imports and exports with the state, according to data from the U.S. Census Bureau.
From January to July, Iowa exported a total of $2.6 billion in goods to Canada. A large portion of that was corn, and Iowa sent $55.1 million worth of it north.
Dermot Hayes, an agriculture economics professor at Iowa State University, said that once Congress passes the deal, Trump could potentially remove tariffs on Mexican and Canadian metals.
This could lead Mexico and Canada to remove their tariffs on U.S. agriculture products, he said, but that would likely be far into the future.
Hayes said that a new dairy market opened in Canada that would be beneficial to Iowa dairy producers. A previous Canadian policy, the Class 7 milk policy, restricted dairy imports and made it cheaper for Canadian processors to purchase domestic dairy products.
However, he said, the new negotiation may not offset the effects of trade disputes with China on Iowa’s agriculture market.
“China will still be a huge contributor because of our soybean market,” Hayes said.
RELATED: NAFTA renegotiation encourages Iowa leaders
Currently, dairy products are a smaller portion of total exported goods from Iowa. The state sent $32.7 million in dairy exports to the international market between January and July. In total, Iowa exported $8.7 billion in goods and services to all countries in the same time period.
Last year, 47.52 percent of Iowa’s exports went to Canada and Mexico, with about one-third of those products going to Canada, according to the Iowa Economic Development. Exports to Canada have increased 6.2 percent from 2016 to 2017, the state library reports.
With the expansion of markets, Sen. Joni Ernst, R-Iowa, said she believes there will be more opportunity for Iowa farmers, which she believes could partially offset losses from trade disputes with China.
“It will help grow our ag economy a little bit, [but] China is still an issue we will need to work out in the upcoming months,” Ernst said. “China is just very different and very difficult.”
She said the state dairy market may grow with the new trade agreement.
“… the fact that now we are able to get dairy into Canada is a starting point,” Ernst said. “Hopefully, we can continue to develop that relationship, I think that’s wonderful, so we will keep pushing dairy to Canada.”
