One of the remarkable things about the U.S. economy is how it’s performed so well despite the self-inflicted wounds of trade wars.
Just last week, the U.S. Labor Department reported job gains of 266,000 in November, as the nation’s unemployment rate fell to its lowest level since the year of the first moon landing.
This robust growth comes despite trade tensions that create uncertainty for farmers and businesses that rely on exports. This is of no small consequence to the St. Joseph-area economy, with its base of agriculture, agribusiness and manufacturing. Just last week, a survey of purchasing managers showed new orders for exports dropped in nine Midwestern states, including Kansas and Missouri.
Congress has a chance to reduce this long-term risk with passage of the U.S-Mexico-Canada trade deal, to replace the North American Free Trade Agreement. Sen. Roy Blunt and Gov. Mike Parson underscored the importance of this trade pact in comments Monday at the Missouri Farm Bureau annual meeting in Osage Beach.
It’s been more than a year since the three North American countries agreed to what’s now known as the USMCA, but the U.S. House hasn’t voted on the deal despite a general consensus that it would gain passage. Whether this was politics or there are real concerns about labor enforcement is in the eye of the beholder, but Missouri’s farmers and businesses are looking for solutions rather than someone to blame.
Today, there’s talk of a deal that finally clears the way for House passage.
“This is great news for our ag industry,” Blunt said in a statement. “For the last year, the question I’ve been asked the most in Missouri is, ‘When will Congress vote on USMCA?’ This agreement with our two biggest trading partners will help our economy, increase jobs and benefit families.”
Passage shouldn’t be characterized as a political victory for one party or another. President Donald Trump, who ran against NAFTA, was wrong to throw out the old pact, but congressional Democrats compounded the problem with delays in voting on the replacement.
What’s clear is that a new deal is better than no deal.
This new accord solidifies market access and trade certainty with two countries that accounted for more than half of Missouri’s exports last year, although USMCA doesn’t address tensions with China. St. Joseph, the state’s third largest center for exports, would reap real economic benefits from North American trade.
Farmers who gathered in Osage Beach this week seem to know that trade should transcend politics. With word of a USMCA deal, let’s be thankful that politicians in Washington, D.C., may finally understand that, too.