Key Words: It’s not weather that could hurt U.S. farmers the most, it’s Trump’s Nafta redo

‘Unless Trump wants to compensate with more taxpayer subsidies, the best way to boost incomes is to let farmers sell in more markets, not fewer.’

Wall Street Journal editorial page

The prospect of trade protectionism leaves a farm belt that largely voted for Donald Trump and ag industry-leading California, which did not go Trump’s way last November, in the same tough spot.

A strong dollar and declining export volumes are already biting the American farmer, notes The Wall Street Journal editorial page. And that’s before the potential risk of sweeping trade reforms billed by the Trump administration as “fairer” for the U.S.

In 2016, the U.S. is expected to export $ 134 billion in agricultural goods, from pork to nuts to corn and more. Exports contribute about 20% of U.S. farm income, and U.S. agriculture ran a $ 19.5 billion global trade surplus in 2015. U.S. farm exports have quadrupled to Canada and Mexico since Nafta took effect in 1994.

Farm groups had estimated the Obama administration-backed, 12-nation Trans-Pacific Partnership, or TPP, would have added $ 4.4 billion annually to the U.S. agricultural sector. Trump has backed away from U.S. participation in TPP. The president, for his part, has stressed that he prefers bilateral negotiations over multilateral deals.

One reason the U.S. benefits from free-trade deals is that America has among the lowest import barriers (5% average for agriculture), so new agreements tear down levies abroad and open new markets, the Wall Street Journal column insists.

“President Trump should consider that reality before escalating on trade—and betraying the Farm Belt voters who are relying on him to bring growth and opportunity,” the editors wrote. “Unless Trump wants to compensate with more taxpayer subsidies, the best way to boost incomes is to let farmers sell in more markets, not fewer.”

Opinion: Trump’s trade policy is more predictable and less isolationist than critics think

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MarketWatch.com – Financial Services Industry News

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