President Trump wants to unravel the rope that binds Iowa’s economy by announcing that he intends to renegotiate the North American Free Trade Agreement with Canada and Mexico.
Trump has spoken with the leaders of both nations and he described them in superlatives. Fantastic. Excellent. Great guy. Very helpful. That’s as far as it goes, other than we know Trump ordered American withdrawal from the Trans Pacific Partnership agreement. He did not go so far with NAFTA but said he would negotiate a new deal.
NAFTA was passed 25 years ago. Over that period we have seen corn and pork exports to Mexico soar. Poor rural Mexicans gave up on maize and moved to Iowa, Kansas and Nebraska to work in meatpacking plants. Or they moved to the northern border of Mexico to work in maquiladora factories making everything from furniture to autos. Or they took their income where they could from the cartels.
Farm sizes in Iowa and Jalisco grew. So did integration with food processors. Hogs no longer are raised by independent yeoman, they are woven into a supply chain of petrochemicals, corn and ethanol and controlled by Wall Street hands.
Undo NAFTA and you upset corn markets, turn Tyson Foods (the largest employer in our city of 10,600) on its ear and send confused immigrant families scrambling.
NAFTA caused jarring dislocations in the USA and Mexico, epic migrations and economic transformations that can’t easily be undone, sort of like Obamacare.
Storm Lake, Iowa, had a half-dozen Latino students before NAFTA. Now it has thousands.
Food processing employment has doubled.
So have land prices, and they are holding.
In 1994, US pork exports to Mexico and Canada were $190 million. Today they are more than $2 billion.
Believe it or not, Mexican pork exports also increased. I personally saw Tyson pork boxes in Mexico that were being further processed in Jalisco for export to Japan.
Mexico consumes more than 60% of the American turkey export market. We are the turkey capital of Iowa.
The Mexicans just as soon would have stayed in Mexico. NAFTA helped drive them over the border.
But they’re here, and Trump says he would rather just have them all go home.
You can’t quite unravel that part of the rope, either. They have no place to go back to. Many came to Storm Lake as children with no choice in the matter. How do you ship those people to Juarez when they can’t even speak Spanish?
Start trash-talking NAFTA from the White House and you talk down corn markets that are trying mightily to make some progress.
Iowa is the largest exporter of ag commodities, and its two biggest markets are Mexico and Canada.
Followed by China, which Trump has excoriated.
It is easier to declare war on the media than it is to win the war. Jeff Bezos, owner of the Washington Post and Amazon.com, has a lot more money than Donald Trump. The stories they will tell.
Likewise Obamacare. Go ahead and repeal it. But what to replace it with? Something fantastic. Something that might cut off 100,000 Iowans from health insurance.
Or global trade and immigration.
It’s one thing to blame Mexico and China for America’s problems. China did not create Ferguson, Mo. But even if it did, does anyone think we will be building Sony TV sets for wages of a dollar a day in Ferguson? Or Nike sneakers?
Does anyone think a renegotiation of NAFTA will restore the peasant farmers in Chiapas and give them rights they never had over the past 500 years?
We bought into the great flattening with NAFTA and Bill Clinton and Newt Gingrich. Iowa farmers got well by it. Bruce Rastetter made a fortune in ethanol and hogs. My friends who raised porkers their whole lives didn’t do so well by it. They got jobs in town. Or they got out.
The ones who got out or got lost are long gone.
Some of them got a better education and figured out how to sell pork and corn and turkeys into Mexico.
Trump gives no clue what his renegotiation of NAFTA will entail. If you think it’s easy, think of Storm Lake over the past quarter-century. How do you unravel all that without letting this little town in the middle of nowhere fly loose? We’re tied into Mexico at the hip. Mess with that market and you mess with hogs, corn, turkeys and eggs in a big way. And that messes with Buena Vista County. Which voted 59.2% for Trump.
Art Cullen is editor of The Storm Lake Times in Iowa, where this originally appeared, and he is managing editor of The Progressive Populist.
From The Progressive Populist, March 1, 2017
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