State’s ag, education leaders worry about effects of Mexican trade war

Posted March 8, 2017

Wisconsin businesses involved in agriculture agree that a trade war with neighboring countries would hurt the state’s economy.

President Donald Trump recently commented on the North American Free Trade Agreement (NAFTA), “I think NAFTA has been a terrible disaster.” As a result, public officials in Mexico have made statements about finding different countries to trade with.

Businesses and farmers in Wisconsin agree there may need to be some reforms, but a trade war would not help.

“Between Mexico and Canada, those two countries account for just shy of 47 percent of Wisconsin’s total exports,” said Kurt Bauer, CEO of Wisconsin Manufacturers & Commerce (WMC), the state’s chamber of commerce. “Any talk about renegotiating NAFTA and there is going to be some cause for concern. Whether you are in agriculture or manufacturing, Wisconsin is a state that makes things, grows things and processes things. We need to sell those things overseas. Because, frankly, 95 percent of the world’s consumers live outside of the United States.”

Wisconsin’s largest export partners are Mexico and Canada. Mexico accounts for $2.97 billion and Canada is an even stronger partner, accounting for $7.31 billion. However, there are restrictions on dairy trade with Canada. Other countries that have strong export trade markets with Wisconsin are China, United Kingdom and Japan.

Trade is vitally important to Wisconsin’s economy, agreed Dean Van Galen, chancellor of UW-River Falls.

“I am concerned on two levels. One is in terms that Mexico is a very important trade partner… especially agricultural-related industries,” Van Galen said. “The other concern is regarding the exchange of students.”

Last spring, a delegation from Wisconsin interested in trade went to Mexico. The group was led by Ben Brancel, the state’s secretary of Agriculture, Trade and Consumer Protection, and included Van Galen and Gov. Scott Walker.

Van Galen, Brancel and Walker attended the International Conference on Dairy Cattle in Jalisco, Mexico. The conference gave Wisconsin businesses opportunities to learn about potential markets in Mexico and to speak directly with producers and exporters, with hopes of building agricultural business partnerships.

“UW-River Falls has the second-largest dairy program in the United States. Mexico is a very important trade partner,” said Van Galen.

Ties with Mexico already run deep and many Wisconsin farmers are concerned about what might happen with the relationship, especially in matters of trade and undocumented workers.

“When we are talking trade agreements, Mexico is the No. 1 export destination as far as dairy is concerned,” said Joe Bragger, a dairy farmer in Buffalo County.

Dale Beaty, the chief administrative officer of the Wisconsin Farm Bureau, noted that “25 to 30 percent of all of farm revenue in Wisconsin comes through trade — that’s a big portion of our revenue.”

He added, “We are just waiting to hear what President Trump is going to do. Trump has talked about bilateral agreements. We are in a wait-and-see position. The last thing we want to see is a trade war kind of thing.”

Many of Wisconsin’s farmers rely on exports to some extent.

“We are very diverse in almost every area and that is a blessing. Corn, wheat, dairy, potatoes and beans, and even bull semen — we export a lot across the board,” said Beaty.

Wisconsin farmers also rely on undocumented workers.

“Another issue that is very closely tied to this is immigration and we have people who are undocumented workers from Mexico milking our dairy heard and we have seasonal harvesters,” said Bauer of Wisconsin Manufacturers & Commerce.

“I have workers who are from Mexico and they are outstanding! Agricultural will be in a real crimp if we don’t recognize the value of those workers,” said Bragger.

“While we don’t trade directly with Mexico that doesn’t mean we won’t be affected,” said Paul Bauer, CEO of the Ellsworth Cooperative Creamery. He added that even dairy businesses that don’t trade directly with Mexico could feel the effects of changes in policy.

No one understands what Trump’s goals are, but experts think he maybe trying to reach bilateral agreements with individual countries, said Kurt Bauer of Wisconsin Manufacturers & Commerce.

Those involved in trade feel confident that the state’s representatives in Congress understand what is at stake.

“Paul Ryan clearly knows and understands what is best for Wisconsin,” Kurt Bauer said, referring to the Republican Congressman and speaker of the U.S. House of Representatives from Janesville.

“The most lucrative markets are in Asia. Not only are we concerned what is happening in North America but what is happening over there, as well,” Kurt Bauer said. The president has not had a specific proposal for renegotiating NAFTA and but said the trade agreements are not fair. Kurt Bauer said he would like to see Trump to follow through on those promises.

In addition to agriculture trade, exchanging students is important, too, Van Galen of UWRF added.

Late last June, UW-River Falls finalized details of a new exchange program in Puebla, Mexico, that fits with UWRF’s strategic goal to promote global education and engagement.

Van Galen said it is really important for students to have an international experience whether they are from Mexico or River Falls.

“For us as a university, global engagement and awareness is one of our three goals,” said Van Galen. “Programs like this provide a wonderful experience for our students.”