2019 Spudman Today: Issue 1
Trade in 2019

Trade was uneasy for growers throughout the past year with the end of the North American Free Trade Agreement (NAFTA) in sight while growers tried to work through retaliatory tariffs. Tomorrow afternoon Tony Payan, director of the Mexico Center at the Baker Institute in Houston, Texas, will go over changes in North American trade over the past year and outline what growers should focus on going into the new year.

Tony Payan. Photo: Baker Institute

Payan’s research focuses primarily on border studies, particularly the U.S.-Mexico border. His work includes studies of border governance, border flows and immigration, as well as border security and organized crime.

A key topic during Payan’s presentation will be trade wars and what they mean for the agriculture industry. One example he will be highlighting are the retaliatory tariffs growers experienced throughout 2018 — how they impacted exports and market opportunities.

“Countries look carefully at the products they’re going to target and they seek to maximize the pain, specifically for the political base of the politician/president imposing those sanctions or tariffs,” Payan said. “(U.S.) agriculture is very vulnerable because it’s so good, so efficient and they’re such good exporters but they’re also closely related to the president. (Farmers) are openly a target for anyone looking to impose maximum political pain on his base. So we need to get the president to understand that the ag sector is particularly vulnerable.”

Payan will also give an update on the United States-Mexico-Canada Agreement (USMCA) that was signed by each government’s leader on Nov. 30. The USMCA is not perfect, but it is an improvement from NAFTA, Payan said.

“It actually includes many other provisions that modernize trade among all three countries, liberalizes other areas, and presents even more opportunities for commercial activity and economic integration,” he said. “In the end, despite all the uncertainty that opening a renegotiation of NAFTA (North American Free Trade Agreement) brought about, we ended up with a better agreement.”

Signing the agreement, however, is just the first step. Each country’s legislature must approve the USMCA in order for it to replace NAFTA. The potato industry must now convince Congress to act on it and do so quickly, Payan said.

“The agricultural sector is one of the greatest beneficiaries of this agreement,” he said. “It is left untouched and full of opportunities to advance trade. It is up to the agricultural lobby now to do the work and ensure that everyone can participate.”

The Potato D.C. Fly-In coming up Feb. 25-28 will give growers and other industry representatives the opportunity to meet with members of Congress and discuss the USMCA. Payan recommends Fly-In attendees work on building allies within both political parties and ask their representatives to inform President Trump on how trade wars or issues can affect the agriculture industry.

“Farmers, in particular, have proven to be very vulnerable to trade retaliation so they have to be very careful that they spread the message throughout Washington,” Payan said.

Ana Olvera, digital content editor

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