Canada vital market for U.S. pork producers
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As president of the National Pork Producers Council, I’m hearing a lot from our pork producers about the importance of international trade. They were deeply distressed by the U.S. withdrawal from the Trans-Pacific Partnership deal; they are extraordinarily concerned about the possibility that the United States may withdraw from the North American Free Trade Agreement (NAFTA), a move that would jeopardize U.S. pork exports to our neighbors to the north and south.

They should be concerned.

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The financial livelihoods of my company and pork producers across America depend on trade. Mexico is our second largest value market for U.S. pork, with exports in 2016 of $1.35 billion, and Canada is not far behind in third place, with exports valued at nearly $800 million. Together, they account for 40 percent of U.S. pork exports globally.

Much of the NAFTA discussion in the United States has focused on Mexico. One reason for that may be that analysts assume if we pull out of NAFTA, the U.S.-Canada free trade agreement negotiated five years before NAFTA would kick in, and we still would be able to export to Canada duty-free. This is subject to some debate, but recent comments by a Trump administration trade official suggest that, if the agreement is terminated, U.S. import tariffs could go even higher than the pre-NAFTA World Trade Organization-bound rates. And if they do, we certainly can’t count on Canada’s tariffs remaining at the WTO levels, either.

NAFTA has changed the terms of trade in pork with Canada. Since the agreement was implemented in 1994, our exports have grown more than twice as fast to Canada as they have to Mexico. It’s true that we still run a trade deficit in pork with Canada, but our exports to that market have grown by 1,752 percent, whereas Canada’s shipments to our market have grown by just 176 percent.

Canada also ships more live hogs south than we do north. But the vast majority of those Canadian hogs have most of their valued added in the United States, where they are fed and finished. In any case, NAFTA has helped improve our bilateral trade position with Canada. And, because of trade deals such as NAFTA, the United States has become the leading pork exporting nation in the world.  

Regardless of how you cut it, our industry is better off because of trade and because of NAFTA. Here are the salient facts: In 2016, we produced 11.3 million metric tons of pork; we consumed 9.5 million; we imported 500,000; and we exported 2.4 million. Of those pork exports, which went to more than 100 countries, more than half were shipped to the 20 with which the United States has free trade agreements, such as NAFTA. But if we lose export markets (starting with the NAFTA countries), we will see a severe retrenchment in our industry accompanied by lower live hog prices and many fewer U.S. pork producers. That means less employment not only in our sector but throughout many parts of rural America; it means less demand for veterinarians, truck drivers, bankers and many others who provide products and services on which we depend. For the most part, our hogs consume U.S. corn and soymeal, so losing exports also means less sales of those products.

Our producers will continue to support the Trump administration’s efforts to improve and modernize NAFTA. But our financial livelihoods are tied to trade, particularly with Canada and Mexico. Losing NAFTA would be financially devastating to our industry and much of rural America, most of which heavily supported the president in his election.

Ken Maschhoff is a pork producer from Carlyle, Ill., and president of the National Pork Producers Council.