Iowa industry and government officials want the United States to continue trade renegotiations with Canada and Mexico, even after the president said this week he thinks the deal will have to end.
Speaking at a campaign-style rally in Phoenix Tuesday, President Donald Trump said that even though renegotiations of the North American Free Trade Agreement are ongoing, he does “not think we can make a deal because we have been so badly taken advantage of.”
“I think we’ll end up probably terminating NAFTA at some point, OK? Probably, probably,” Trump said at the rally. “But I told you from the first day that we will renegotiate NAFTA or we will terminate NAFTA. I personally don’t think you could make a deal without a termination, but we’re going to see what happens, OK?”
Trump’s statements came just days after trade representatives for the United States, Canada and Mexico wrapped up their first round of negotiations in Washington, D.C. A second round of talks will take place in Mexico starting Sept. 1, representatives from the three nations said in a joint statement.
“While a great deal of effort and negotiation will be required in the coming months, Canada, Mexico and the United States are committed to an accelerated and comprehensive negotiation process that will upgrade our agreement and establish 21st Century standards to the benefit of our citizens,” they said.
Craig Hill, the president of Iowa Farm Bureau Federation, said it makes sense to take a new look at NAFTA, but it would be “hazardous” and “fruitless to renege on our obligations.”
“To walk away from that or to walk away from our commitments I think would lead to a trade war where no one would win,” Hill said.
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Updates to NAFTA, Hill said, should include ways to deal with new innovations such as biotechnology and gene editing that have emerged since the deal began in 1994.
“The Roundup Ready soybean had not even been commercialized until ’96,” he said as an example.
Mike Ralston, president of the Iowa Association of Business and Industry, said he was surprised by Trump’s comments in Phoenix. Given a number of Iowa manufacturers make agriculture-related products, trade has been beneficial for the sector, he said.
“Something needs to be in place. Trade is important, more trade is better, free trade is best,” Ralston said. “It needs to be fair and it needs to be negotiated smartly, but there ought to be these agreements in place. There need to be.”
Iowa officials have often touted the need for the state to sell its products to other countries. Canada and Mexico are Iowa’s two largest export partners.
The state exported about $5.7 billion worth of goods to the two countries last year, which was 46.6 percent of all of Iowa’s exports.
“I think it is important to let the renegotiation process play out, and in the end I’m confident the administration can reach an agreement that works as well for the rest of the economy as it has worked for agriculture,” Iowa Agriculture Sec. Bill Northey said in an emailed statement.
U.S. Sen. Chuck Grassley, R-Iowa, cautioned against leaving NAFTA without another trade deal option on the table.
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“I’d like to see what comes from negotiations before discussion of withdrawal,” he said in a statement.
A spokeswoman for U.S. Sen. Joni Ernst, R-Iowa, did not respond to an email. At a meeting in Manchester Wednesday evening, though, Ernst said she wants to see the trade deal modernized “in a way to do no harm” that betters trade possibilities for Iowa’s farmers.
Brenna Smith, a spokeswoman for Iowa Gov. Kim Reynolds, said the governor “supports modernizing NAFTA and encourages the administration to finalize this important deal as quickly as possible.”
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