Two days later, on January 3, Iowa voters will attend the Democratic and Republican caucuses and choose among presidential contenders–some of whom appear to believe they’re running for protectionist-in-chief.
Even though NAFTA has helped the United States in general and American farmers in particular, campaigning for president in 2008 apparently means lining up to bash free trade. In last week’s Democratic debate in Des Moines, Hillary Clinton said that NAFTA should be “changed.” Barack Obama argued it ought to be “amended”
That can mean only one thing: The imposition of new duties where none exist now, or where they aren’t scheduled to exist on New Year’s Day.
Republican Mike Huckabee, who seems to have surged into first place among GOP voters, is downright confused about American agriculture’s place in the world economy. “I don’t want to see our food come from China,” he said a few weeks ago.
That statement makes about as much sense as pouring sweet-and-sour sauce on an ice-cream sundae. China is a lot of things, but it’s no food threat: Only about 3 percent of the food we eat comes from China.
As you might expect, a lot of the food we import from China is rice. Even so, U.S. farmers continue to produce about 85 percent of the rice that Americans eat. The national supply of rice could even be greater than it is, because more than half of what our rice farmers grow is shipped to other countries, such as Mexico, Japan, and Iraq.
Any president who prattles on about food protectionism ignores these basic realities and risks economic disaster. If a leader in another country were to spout similar rhetoric, the livelihoods of American farmers would be at stake.
As it happens, Mexicans were once frightened about what NAFTA would do to their corn farmers. Corn is an important part of Mexican culture, much as rice is an important part of Chinese and Japanese culture. As a crop, corn was probably first domesticated in central Mexico 9,000 years ago. It’s a source of both national pride and simple nutrition. Today, the typical Mexican eats about 150 pounds of corn each year.
Mexicans may be masters of corn consumption, but they aren’t efficient at corn production–at least not in comparison to American corn farmers, who are the world’s best. So when NAFTA was being negotiated 15 years ago, the Mexican government was worried that allowing U.S. farmers unfettered access to the Mexican market would drive many Mexican corn farmers out of business.
So the Mexicans aimed to protect their farmers through a series of NAFTA-approved quotas and tariffs. These were scheduled to expire gradually, and they have. Two weeks from today, they’ll be gone completely. The theory, from Mexico’s standpoint, is that its own farmers gained a limited amount of time to prepare for intense competition from El Norte. Many of them used their time well, because Mexican corn production has increased by about 50 percent.
Despite this, the United States has made great gains. In the average year before NAFTA, Mexico imported about 3 million metric tons of corn from the United States. Since NAFTA, the figure has grown steadily. USDA currently predicts that U.S. farmers will sell more than 10 million metric tons of corn to Mexico next year. The only country that buys more corn from the United States is Japan.
The bottom line is that corn sales to Mexico put a lot of money into the pockets of American farmers–and under NAFTA, these purchases are much higher than they would have been otherwise. A “changed” NAFTA or an “amended” NAFTA means fewer sales, to say nothing of what would happen under a president who frets about food imports from a country that sends us very few.
If the Iowa caucuses were a contest of ideas rather than candidates, I know how I’d cast my vote–for NAFTA, and for free trade.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology.