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Iowa’s economic picture just got brighter

By Staff | Dec 26, 2019

As 2019 draws to a close, positive trade developments are making Iowa’s economic picture very bright for 2020 and beyond.

The long-delayed U.S.-Mexico-Canada Agreement appears almost certain to be approved by Congress in the very near future. The trade pact, which was negotiated more than a year ago, was held up because Democratic leaders in the U.S. House of Representatives have been engaged in months-long negotiations with the Trump Administration regarding USMCA. On Dec. 10, however, it was announced that those discussions have reached a successful conclusion. That means that the trade measure should now pass both houses of Congress quickly.

This agreement is enormously important to agriculture and to the U.S. economy as a whole.

“USMCA is a big win for American workers and the economy, especially for our farmers and ranchers. The agreement improves virtually every component of the old NAFTA, and the agriculture industry stands to gain significantly,” said U.S. Secretary of Agriculture Sonny Perdue in a statement celebrating the agreement between the Democrats and the administration.

According to the USDA, Canada and Mexico rank as the top two export destinations for American food and agricultural products. In 2018, the value of those sales totaled an impressive $39.7 billion. These exports support about 325,000 jobs across the United States.

The significance of the USMCA for the Hawkeye State is huge. According to Iowa Secretary of Agriculture Mike Naig, each year Iowa’s exports to Canada and Mexico amount to more than $10 billion. The new agreement eliminates additional tariffs. Therefore, it should make it possible for Iowa to sell even more goods to our North American neighbors in the years ahead.

With the importance of this trade relationship in mind, Gov. Kim Reynolds enthusiastically welcomed the forward progress of USMCA.

“Mexico and Canada are Iowa’s top two trading partners and are critical to our economy,” the governor said. “(The announced agreement) represents a positive step forward for Iowa’s entire economy. USMCA is a strong, balanced, and modern trade agreement that will create opportunities for Iowa families, farmers, manufacturers, and small businesses by expanding markets for our world-class exports.”

Farm News strongly agrees. It is unfortunate that Washington politics has delayed congressional approval of USMCA. We are pleased, however, that there is finally bipartisan recognition that this trade arrangement is of vital importance to our nation and that it must be supported. USMCA’s final approval, coupled with the recent progress in expanding agricultural sales in Japan, are encouraging news. They complement each other and increase markets for Iowa’s farmers and producers of agricultural products. Iowa’s governor and our two U.S. senators – Charles Grassley and Joni Ernst – have all worked tirelessly to keep Congress focused on the importance of getting USMCA approved. All three deserve applause for their efforts.

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