NAFTA talks loom large for Minnesota
Minnesota has much at stake as talk between the Trump administration and Canadian and Mexican officials begin renegotiating the North American Free Trade agreement, commonly known as NAFTA.
Minnesota’s rich agricultural base and its diverse manufacturing sector, creating everything from medical devices manufactured in the Twin Cities to farm and heavy equipment parts made at Dotson Foundry in Mankato, have always been of interest to foreign buyers. But prior to NAFTA’s implementation in 1994, many of those goods were difficult to export to our neighbors to the north and south due to high tariffs and other trade restrictions.
Minnesota long had a huge trade deficit with Canada, with many more imports than exports. Since NAFTA, that trade deficit has been cut nearly 60 percent. And Minnesota long had a trade deficit with Mexico, but now exports more products there than are imported here. Many of those exports have been corn and other farm products.
In fact, Canada and Mexico are now the top trading partners for Minnesota, according to state government figures.
That’s why a wide array of agricultural and manufacturing associations in Minnesota have been working to ensure that a renegotiated NAFTA does not trigger trade wars on certain products that would harm Minnesota producers and manufacturers.
As productive as Midwest farmers are, the United States produces just one-fifth of the global supply of corn. A rewritten NAFTA agreement that puts Minnesota crops at a disadvantage would be a blow to the state’s economy and to farmers, particularly with the recent years of low crop prices expected to persist into at least the near future.
If Midwest crop markets are too costly, Mexico can easily turn to South American countries to fill the void.
Renegotiating NAFTA is not in itself a bad idea. Any agreement made nearly 25 years ago undoubtedly requires some adjustments to address current global markets.
It now rests with the Trump administration to ensure those changes don’t trigger trade wars and that they create more benefits than pain for the country’s economy.
— Mankato Free Press