November 14, 2017
Editors' note: Gordon Stoner is President of the National Association of Wheat Growers. He was a panelist at an October 31, 2017 U.S. Chamber event, "The Future of NAFTA: The Stakes for American Agriculture and Business."
On average 50% of wheat grown in the United States is exported around the world, making trade a vital market to myself and fellow wheat growers. Our main message in North American Free Trade Agreement (NAFTA) re-negotiations is “Do no harm.”
NAFTA is one of our most important trade agreements. Just last year alone, Mexico was our largest export market with about three million metric tons of wheat and is consistently in the top ten. Prior to NAFTA, U.S. wheat was subject to high tariffs and other trade barriers in Mexico. With zero duties and lifted tariffs, exports to Mexico increased by 400% ten years after implementation of NAFTA, compared to ten years prior to NAFTA.
While we hope calls for withdraw are just rhetoric, we are taking this threat very seriously. In fact, threats alone have already hurt U.S. wheat. When it comes to commodities, if a customer is unsure of the reliability of their source, they will look to our competitors. Mexico has done just that after a trade mission to Argentina and Brazil in May which led to Mexican millers purchasing Argentina wheat. The first shipment purchased by eight companies will be made in late December and will be 30,000 metric tons of wheat as a trial.
A recent report from the Department of Agriculture’s Global Agricultural Information Networkhighlighted recent accounts that this purchase was in response to uncertainty surrounding the NAFTA agreement. It also mentioned that the Mexican milling industry has requested access to wheat from Germany, Poland, and Australia as part of an ongoing strategy for the “best price and quality combinations for wheat on the world market.”
As uncertainty surrounding re-negotiations of NAFTA continues, reports such as this continue to worry wheat growers. Wheat, as are many crops in America, is facing low prices and high surplus. Our farm economy is struggling, and we look to current and new trade markets to sell our high-quality product.
We support open, and fair trade, and believe that the U.S. is a natural fit for both Mexico and Canada with our shared borders that allow for easy transportation compared to our competitors and our high-quality wheat that produces high-quality products for consumer’s tables.