Trump’s strategy will bring better deal for NAFTA
AUSTIN, Texas — It’s hard to think clearly in today’s political climate.
People who hate President Trump think he’s the next Adolph Hitler, and his supporters think it’s OK to use “alternative facts.”
Perhaps that’s why it took a Canadian to say the most rational thing in the Viva Fresh 2017 education session on NAFTA April 21.
Ron Lemaire, president of the Canadian Produce Marketing Association, said Trump tests the political waters with his statements (and tweets), which is a brilliant strategy because he can gauge how people react.
Having watched the Trump campaign and his early presidency, I can’t agree more.
Take NAFTA for instance.
During the campaign, Trump called it the worst trade deal ever for American workers and said he’d pull the U.S. from it.
Since being president, he continued to say he planned to pull the U.S. from the agreement.
But on April 27, after talking to Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto, and hearing from countless Americans, Trump said he would not withdraw the U.S. but rather renegotiate the deal.
NAFTA is hugely important to the agriculture industry.
For example, panelist Luis Ribera, an economist and professor at Texas A&M University, reminded the audience that the U.S. is the largest agriculture exporter in the world, deriving 35% of its revenue overseas.
Lemaire said the U.S. and Canada are the world’s largest trading partners, and both countries continue to see growth, both in agriculture and other industries.
It would seem that Trump is crazy to risk this mutually beneficial relationship with Canada and Mexico. He isn’t, of course. He is negotiating.
Panelist Luis Martinez, agriculture counselor at SAGARPA, Mexico’s equivalent of the U.S. Department of Agriculture, said three of the top five Mexican export items to the U.S. are fresh produce: avocados, tomatoes and peppers.
He also said during NAFTA’s time, Mexico has risen from a backwards farming system to become the 12th-largest food producer in the world.
It would seem that Trump is crazy to risk this mutually beneficial relationship with Canada and Mexico.
He isn’t, of course.
He is negotiating.
While Donald Trump’s rise from reality TV star and annoying rich person to American president was unthinkable for millions of Americans, his strategy was patently obvious.
He wrote about most of it in his book, “The Art of the Deal,” published in 1987.
He lists 11 steps for business success. Among them:
- think big;
- protect the downside, and the upside will take care of itself;
- use your leverage;
- fight back; and
- have fun.
You could see all of these during the presidential campaign, and you can see all of these in play as Trump deals with NAFTA.
He got elected in part by appealing to the working class who felt left out by a global economy. Trump promised big, a return of jobs.
Trump has threatened pulling out of NAFTA, which would certainly hurt American jobs and companies, but it would be even more devastating to Canadian and Mexican business.
Leverage.
Follow Trump on Twitter and you can see daily examples of him fighting back and having fun.
And as Lemaire pointed out, you can see him throwing lots of ideas out and gauging how people react.
Many agriculture interests told Trump last week how important NAFTA is to their business, and surely he took that into account and will continue to do so as the deal is renegotiated.
Both Trudeau and Peña said they’d consider new NAFTA terms, which makes me think they know there’s more to lose than gain with Trump.
Trump has also said it’s good business to come up with outcomes that benefit all parties.
NAFTA certainly does that.
SAGARPA’s Martinez said while produce items are three of the top five Mexican exports to the U.S., the other two are beer and tequila.
Surely Trump can see how high the NAFTA stakes are.
Greg Johnson is the editor of The Packer. E-mail him at gjohnson@farmjournal.com.
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