I admit it: I’m among those responsible for a trade deficit with Mexico.
Avocados, onions, hot peppers, limes and Mexican beer are usually on my grocery list.
But perhaps not for long. Prices for those products and others could rise dramatically if President Donald Trump’s proposed 20 percent tariff is adopted.
While the United States produces much more food than its residents can eat, Mexican-grown produce is common in our grocery stores this time of year.
Depending on your age, you may remember when the fresh vegetables and fruits available at the supermarket were much more limited.
Avocados and strawberries, for example, were available only seasonally, during their U.S. harvest and a few weeks after.
But over the last two decades, growers and grocers have expanded their markets, creating an abundance of fresh produce and other products 12 months a year.
Costs are reasonable, in part because of the North American Free Trade Agreement, which made it easier for companies to do business across international borders.
These days, that’s supposed to be a bad thing.
Trump argues that NAFTA is among the many trade deals that have ruined America. He says he will trash the current deal and renegotiate.
It is true that growth in international trade has created pain for some U.S. workers, as companies move plants and shift or eliminate jobs.
But it’s a mistake to view trade pacts as the cause of the pain.
No economy is static. And international trade dates back thousands of years.
Trade agreements have been a means of dealing with the complex economies and continually changing interactions that take place among nations.
But Trump doesn’t view trade pacts as a way to manage evolving economies.
He thinks pacts create change – change he doesn’t like.
Already, the president has withdrawn the United States from the Trans-Pacific Partnership, which was negotiated during Barak Obama’s administration.
Ditching TPP means Kansas agriculture and manufacturing are losing out to other nations that will export goods and services to a large network of nations with Pacific ties.
Trump’s call for a 20 percent tariff on products from Mexico will cost Kansas again, as consumers pay higher prices for everything from limes and strawberries to cars and TVs.
Kansans especially should worry about the destruction of international trade deals. The agreements have helped build export markets for Kansas-grown crops, the state’s aviation industry, and farm and industrial equipment made here.
Our trade balance with Mexico provides an example. In 2015, the U.S. imported $316 billion worth of goods and services from Mexico. We exported $267 billion worth of goods and services to Mexico that same year, according to federal data.
While it’s true that we had a $49 billion trade deficit with Mexico, on a per-capita basis, the United States is far ahead.
Mexico, which has a much smaller population, spent $2,170 per capita on U.S. imports in 2015, while U.S. residents spent an average of $975 on Mexican goods and services.
Anti-trade advocates, including the president, argue the United States can fuel its own economy by curtailing imports.
That’s part of Trump’s “America First.”
But don’t confuse a slogan for a trade strategy.
Strategy requires precepts regarding international trade. Trump has none. He merely argues he can cut better deals with countries on a one-by-one basis.
Doubtful. But even if he can, the deals would be no more binding than the ones Trump is trashing.
Similarly, it is unclear that the United States will abide by the rules of the international community as governed by the World Trade Organization. Trump has made clear his disdain for the WTO.
“America First” definitely could mean fewer imports. It almost surely means fewer exports, as other countries find more reliable and reasonable trading partners.
Kansas farmers and businesses stand to lose billions of dollars every year.
Whether it’s corn headed to China, beef exported to Japan, planes sold in Europe or agricultural machinery marketed in Mexico – Kansas depends on exports.
Our best bet for growing the state’s economy is to expand export markets through international agreements. To work, the pacts must recognize the rights and needs of all the players – not just our own.
A Plains View 