Trade Agreements Vital to South Dakota’s Economy
By U.S. Sen. Mike Rounds (R-S.D.)
Free and fair trade plays an important role in the American economy. It not only leads to more jobs and higher wages, it allows American producers to promote and sell their goods across the globe by leveling the playing field with other competitors. Our farm economy, in particular, benefits from trade agreements. As our number one industry in South Dakota, I continue to promote and prioritize trade agreements that benefit our farmers and ranchers.
I continue to hear from South Dakota producers and ag groups who are concerned about the future of trade agreements. At Dakotafest, the State Fair and other events across the state last month, producers repeatedly told me that opening up new markets for American exports will greatly benefit their operations. Foreign markets absorb approximately 20 percent of all U.S. agricultural production today, which significantly contributes to the overall health of the farm economy. The economic benefits of agricultural exports also extend to businesses in rural communities, while overseas farm sales help to buoy a wide array of industries linked to agriculture, including transportation, processing and farm input suppliers.
In recent months, President Trump has indicated his desire to renegotiate the North American Free Trade Agreement (NAFTA) and modify – if not completely withdraw from – our trade agreement with South Korea. Both of these agreements benefit South Dakota producers because we have no tariffs or limits on the quantity or value of products that can be imported and exported with countries such as Mexico and Canada. In 2016, American farmers sent $20.5 billion worth of exports to Canada and $17.8 billion worth of exports to Mexico, which is the largest market for U.S. corn and soymeal, the second largest market for U.S. soybeans and the third largest market for U.S. beef. Additionally, South Korea is one of our top export markets, with $6.2 billion in ag exports last year alone.
We all want the best deal we can get, and I support the president’s goal to make the best possible trade deals that will improve America’s ability to export products. However, simply withdrawing from long-standing trade agreements without a similar structure in place would cause significant harm to South Dakota’s producers, and I would strongly oppose such action.
Earlier this year, I sent a letter to the new U.S. Trade Representative, Ambassador Robert Lighthizer, to encourage him to maintain strong relationships with our allies in NAFTA and work to open up new markets around the world for American ag products. I also met with him prior to his confirmation to discuss increasing trade opportunities for U.S. producers. I was pleased to hear that he agrees with me on the importance of trade for our ag economy, and in fact, this spring, the Trump administration announced an agreement had been reached to allow for U.S. exports of beef, poultry and natural gas into China. South Dakota ranchers are now able to sell high-quality beef in this new and lucrative market. I continue to encourage the administration to increase trade access to markets in other parts of Asia and the Pacific Rim region as well.
As we continue to discuss new opportunities for trade, I will work with the administration to promote and prioritize South Dakota’s agricultural industry. Opening up new markets for trade will bring a much-needed boost to South Dakota’s farm economy and lead to higher-paying jobs across the state.