Regardless of whether you support President Donald Trump, recently announced trade agreements are good news for Kansas.
For the most part, the agreements hyped by the White House restore trade relationships that existed before Trump started trade wars with much of the world, including the nation’s three biggest trading partners: Canada, Mexico and China.
Given the harm caused, getting back a measure of stability in international markets is good news for farmers and Kansas businesses.
The new NAFTA — called USMCA — offers that, but not much more.
It certainly does not qualify as a “huge, huge Christmas present,” which is how Rep. Roger Marshall, R-First District, described USMCA in December.
Rather, USMCA is expected to increase farm exports by 1.1% once the deal is fully implemented in six years, according to official federal estimates. A piece in the Wall Street Journal said most of that growth will come from “small increases of U.S. dairy, poultry, wheat and alcohol exports to Canada.”
The deal with China has similarly been oversold by Trump and his supporters.
For example, the president claims that China has agreed to buy $50 billion more every year in U.S. farm goods, but that’s not what the agreement says. The actual agreement includes much lower numbers, according to Factcheck.org, and only for a couple of years. Further, the agreement gives easy outs to China (and to the United States) if it can’t or won’t keep those commitments.
For farmers — and for manufacturers and other businesses — the deals are still better than the destructive and volatile policies of the past couple of years. But they fall short of trade agreements, such as the Trans-Pacific Partnership, that Trump wrecked.
Granted, foreign trade is complex, and no one should expect too much from any pact.
Trade agreements should establish a framework through which U.S. companies do business overseas, and through which international companies do business here.
Factors beyond that framework also affect export and import markets. For agriculture, the factors include commodity prices, weather and diseases that affect crops here and elsewhere, the relative value of the dollar compared to foreign currencies, and the ability of consumers overseas to purchase U.S. goods.
For manufactured and other goods, the picture grows even more complex, as components and raw materials often pass through numerous stages and countries before ending up in a final product.
Trump is the first president in more than 50 years whose policies don’t aim to ease trade barriers and promote free trade for U.S. businesses. Instead, his deal with China is short-term and unsustainable.
It’s vital that the success of U.S. policies be measured by real numbers, not boasts and bullying.
For the past year, here’s what the numbers tell us:
