Mexico, Canada, Minnesota Officials Agree Trade Is Important

Mexicans eat nearly $23 million worth of Minnesota turkey products a year, and Canadians consume about half that.

The two United States neighbors and Hong Kong are, by far, the major importers of Minnesota turkey.

At the same time, Canada sells $364 million of wood to Minnesota and Mexico collects $365 million from Minnesotans for electrical machinery.

The state has strong economic connections with Canada and Mexico, with a large variety of goods going back and forth across the borders.

Twin Cities-based consuls for the two countries told a Minnesota Chamber of Commerce audience Tuesday, April 10, that they are optimistic robust trade will continue as negotiations to revamp the 25-year-old North American Free Trade Agreement appear to be nearing an end.

However, Canadian Consul General Paul Connors told Forum News Service that work on NAFTA is not finished because “the puck isn’t in the net.”

President Donald Trump launched the NAFTA negotiations, saying the trading pact was a bad deal for the United States. His anti-NAFTA rhetoric has eased, but the president has not committed to signing a new deal.

“We are fairly close on NAFTA and if we don’t make the right deal we’ll terminate NAFTA and we’ll make the right deal after that,” Bloomberg news service quoted Trump as saying this week.

Connors and Mexican Consul Gerardo Guerrero said NAFTA needs updating (such as removing a reference about cassette tape players in cars), but its basic provisions have helped people in all three countries.

The St. Paul Mexican consulate, for instance, reports that Minnesota’s exports to Mexico have increased 865 percent since NAFTA was signed.

The Minnesota Department of Employment and Economic Development says that Canada is the biggest buyer of state goods. Of $21 billion in exports to countries around the world last year, Canada amounted to $4.3 billion.

Mexico bought $2.3 billion worth of goods, DEED reported.

At the same time, Minnesota paid Canadian companies $10 billion last year while Mexico received $2 billion for its products. Minnesota’s second-largest supplier of goods is China.

While most types of trade among the United States, Canada and Mexico have increased since NAFTA was written, agriculture trade has done far better.

But Bill Blazar of the state Chamber of Commerce said farmers and agri-business people are watching NAFTA talks, and an unrelated trade dispute with China, very closely after five years of low prices paid for their goods.

“The ag guys could use some good news,” Blazar said.

Businesses in all size communities benefit from trade, Blazar said. For example, officials from the chamber-related Grow MN project visited 19 Willmar manufacturers in recent years, and 11 reported they export products.

The Canadian consulate says Minnesota’s top exports to the northern neighbor are corn-based ethanol and animal feed. Mexico, meanwhile, is the top importer of Minnesota corn, dairy products and turkey.

Connors said that Minnesota-based General Mills’ Cheerios cereal is 90 percent western Canadian oats. Canada’s New Flyer bus maker has Minnesota factories in Crookston and St. Cloud.

Such cross-border work, Connors said, means “you grow the economic pie between the countries.”

Commissioner Shawntera Hardy of the Minnesota Department of Employment and Economic Development said that more than 118,000 Minnesota jobs are connected to trade. Trade with the two countries helps Minnesota weather tough economic times, she added.

Connors urged Americans to keep telling the Trump administration that NAFTA is important. “American stakeholders speaking out has moved the needle with the administration.”

Guerrero said he hopes NAFTA 2.0 can be finished before his country’s July elections and the American vote in November. However, he said, he does not want to rush the work.

The Mexican official told chamber members there is no direct connection between NAFTA and controversy surrounding immigration. “We don’t want to pollute one thing with another.”

However, he admitted afterwards that the immigration issue ramps up tension between the countries. “It’s something we cannot deny.”

Connors said that the average Minnesotan may not notice much if a rewritten NAFTA is approved, but certainly would see a difference as tariffs, perhaps as much as 20 percent, likely would be added to goods sold over borders.

Blazar said that the potential of those tariffs, as well as some threatened by China, have small businesses scrambling.

Two mid-sized manufacturers he recently visited in greater Minnesota reported that prices of supplies they need from other countries already are increasing, even though there have been no tariff increases.

Blazar warned federal politicians need to realize that “like it or not, it is a world economy.”