Wisconsin Farmers Union President and Westby dairy farmer Darin Von Ruden attended yesterday’s roundtable on agriculture and international trade hosted by U.S. Trade Representative Michael Froman and U.S. Representative Ron Kind (WI-3) in Melrose, Wisconsin. Von Ruden shared the following observations following the meeting:

“I left yesterday’s meeting with Ambassador Froman and Congressman Kind asking myself, ‘haven’t we learned anything from the past 20 years of failed U.S. trade policy?’ Behind the rosy projections about the benefits of free trade, history presents us with the cold hard facts. The 1993 North American Free Trade Agreement (NAFTA) has been devastating for farmers in the U.S., and we are headed down the same path with the current Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (T-TIP) proposals.

The sad legacy of NAFTA is that while agricultural exports have increased in the years since the deal was signed in 1993, agricultural imports from Canada and Mexico to the U.S. skyrocketed. As a result, the U.S. has an overall trade deficit with Canada and Mexico in many agricultural goods. In the first seven years of NAFTA, the U.S. went from having a $21 million trade surplus in cattle and beef to a $152 million deficit. The trade deficit for fresh and frozen vegetables grew from $438 million in 1995 to more than $1 billion in 1999. In the dairy sector, the trade deficit ballooned from $416 million to more than $1 billion in the same time period.[1]

This trade deficit phenomenon is generally true for the countries with which the U.S. has free trade agreements. Although U.S. agriculture has a substantial net trade surplus with the world as a whole, U.S. agriculture is running a net trade deficit with countries that have Free Trade Agreements with the U.S.[2]

Prices to U.S. farmers have also suffered because of ill-conceived free trade deals. During the first seven years of NAFTA’s existence, corn prices in the U.S. fell 33%, wheat prices dropped 42%, soybeans prices decreased by 34%, and rice prices fell 42%.[3] Since NAFTA was implemented, 300,000 family farms in the U.S. went out of business, and overall, net farm incomes are down 13 percent.[4] NAFTA has proven to be anything but the boon for farmers that free trade cheerleaders promised in 1993. Nonetheless, Congressman Kind and Ambassador Froman used the same arguments in favor of the TPP and T-TIP today as were offered to push through NAFTA in 1993. Fool me once, shame on you. Fool me twice, shame on me.

In addition to driving down prices, poorly-crafted free trade deals also drive down wages and workplace standards. Given a level playing field, U.S. farmers and manufacturers can compete with the best on an international scale. However, we all know that the worldwide playing field is not level. For example, the average wage in Vietnam is $1 per hour. There is a real danger that the TPP will pave the way for multinational companies to move U.S. jobs overseas, where wages are lower, and health, safety, and environmental regulations are more lax. On the flip side, trade agreements can put businesses in the U.S. in the position of having to comply with regulations set by foreign governments. What recourse does a U.S. cheesemaker have if the Italian government can dictate through a trade agreement which cheese can be labeled as “mozzarella”?

Another concern from the point of view of Wisconsin dairy farmers is that the TPP could throw our doors wide open to unregulated imports of Milk Protein Concentrates. MPC’s, even though they are not regulated as a food product, still find their way into cheese, protein bars, and numerous other food products made in the United States. Imported MPC’s displace demand for milk produced on U.S. farms. The National Milk Producers Federation estimates that U.S. dairy farmers will lose a cumulative $20 billion over the first 10 years of the TPP if the agreement requires to the U.S. to fully phase out restrictions on dairy imports from New Zealand.

We have repeatedly called on Representative Kind to look at both the pluses and minuses entailed in international trade deals, to no avail – he seems to see only the plus side of the equation. Representative Kind represents plenty of Wisconsin Farmers Union members, but on the issue of trade he is not representing us very well.”

[1] Public Citizen, “Down on the Farm: NAFTA’s Seven-Years War on Farmers and Ranchers in the U.S., Canada and Mexico,” June 26, 2001, page 10, available at http://www.citizen.org/documents/ACFF2.PDF

[2] National Farmers Union President Roger Johnson’s Testimony before the U.S. House Ag Committee, May 12, 2011, http://www.nfu.org/media-galleries/document-library/func-startdown/168/

[3] “Down on the Farm,” page 13. See also Daryll E. Ray, “Mexico and Corn,” Agricultural Policy Analysis Center, Sept. 5, 2003, available at http://agpolicy.org/weekcol/161.html

[4]Dustin Ensinger, “NAFTA Redux?,” Economy In Crisis: America’s Economic Report, Dec. 30, 2010, available http://www.economyincrisis.org/content/nafta-redux