President Donald Trump’s rock-hard stance against several international free trade deals is softening, and immigration reform might include guest worker provisions.
Those national topics — along with the importance of exports to the state’s agricultural market — headlined the 13th Annual Agriculture Development forum Thursday, Feb. 1, at the State Fairgrounds in Raleigh. The half-day event covered familiar farm-to-fork campaigns to increase market share. It also probed the intersection of pastures-to-politics policies that affect land use and farmers’ bottom lines.
Agriculture is the state’s top industry, and contributes $85 billion to North Carolina’s $500 billion annual economy, said N.C. State University economics professor Mike Walden.
Randy Russell, president of The Russell Group, a Washington-D.C.-based food and agriculture consulting firm, said the top three importers of U.S. products in 2016 were Canada, $20 billion; China, $19 billion; and Mexico, $18 billion. All three are now in President Trump’s crosshairs for serious trade negotiations.
North Carolina farmers seek certainty in global trade relations, and steady labor availability. Stability is important as farmers increasingly export products to other nations, many of which are in free trade deals President Trump has threatened to end.
Republican governors and GOP congressional members are pushing Trump to stay in the North American Free Trade Agreement with Canada and Mexico, Russell said.
Ray Starling, special assistant to the president for agriculture, trade, and food, has softened Trump’s contempt for the pact, Russell said. Starling formerly was general counsel for the N.C. Agriculture Department, and senior agriculture advisor for the General Assembly.
Thirty percent of all U.S. farm exports go to Canada and Mexico. Since NAFTA went into effect, agricultural exports rose from $9 billion in 1993 to $39 billion in 2017. Even adjusted for inflation, the 1993 number would only be $15.25 billion today.
Russell thinks Trump will stick with NAFTA while requiring modifications, probably pushing back renewal of the deal to the end of 2018.
He said Trump’s harsh criticism of a free trade deal with South Korea, the No. 5 agricultural export market for U.S. products, is the president’s preferred negotiating tactic. He expects Trump will win increased access to the Korean market rather than dropping out of the deal.
The thorniest trade deal restructuring will be with China, Russell said. Although it is the No. 1 U.S. trading partner, and No. 2 export market, he said the Chinese often steal U.S. intellectual property, which is a challenge for Trump’s administration.
President Trump already has imposed tariffs on Chinese washing machines and solar panels. Russell foresees more tariffs on products such as Chinese steel and aluminum. He worries China will retaliate, most likely against U.S. farm products.
Blake Brown, an N.C. State professor and Extension economist, said the U.S. must be careful. Renegotiating trade deals could drive top trade partners to U.S. competitors.
He said Mexico and Central America import large percentages of products from North Carolina including pork, chicken, tobacco, and cotton. If the U.S. ends NAFTA’s preferential treatment of Mexico, Brazil is waiting to swoop in. Brazil’s farm economy is strong and growing, Brown said.
Similarly, China is developing broad agricultural ties in Africa, where North Carolina farm products are sold, and Australia is within reach of half of the world’s population. As the world becomes wealthier, people will demand more meat, Brown said. Meat is one of North Carolina’s best exports.
“Governments don’t trade. Businesses trade,” said Andy Curliss, CEO of the N.C. Pork Council. “A trade war would be cataclysmic, and I use that word cautiously.”
Trading relationships are well-established, and agreements should be modernized, not scrapped, Curliss said.
North Carolina is the nation’s No. 2 pork producer, and ships 25 percent of production to other countries. About half of those exports go to NAFTA countries and South Korea. Curliss said. While pork exports are up across the board, they have increased more to America’s 20 free trade partners than the 174 nonfree trade importers.
Curliss said national immigration issues could impact North Carolina farmers.
“Mexico loves hams,” Curliss said. “We don’t take a position on walls, but if there’s a wall between us and Mexico, we’re going to cut a hole the size of a ham, and we’ll be down there.”
Several speakers touched on farm labor issues tied to the immigration stalemate in Congress.
U.S. Rep. Bob Goodlatte, R-Virginia, chairman of the House Judiciary Committee, delivered a message via video touting his Agricultural Guest Worker Act. He said it would create a new H-2C visa program that would allow guest workers to enter the country legally. The intent is to provide a reliable supply of farm workers when the available workforce is low.
State Agriculture Commissioner Steve Troxler said the H-2C visa is important in North Carolina, which has high-value, labor-intensive crops. The nation is at historic lows for unemployment, and competition for American workers is keen, he said.
“If they build a wall, I just want to make sure there’s a great big door in it” for foreign labor to enter legally, Troxler said.
U.S. Sen. Thom Tillis, R-N.C., also delivered remarks via video. He said resolving how to handle immigrants under the Deferred Action for Childhood Arrivals (DACA) program is an important first step to resolving North Carolina’s farm labor problems.