Letters from the West

Trade war would injure Idaho’s farmers and economy, but Trump could help timber industry

Cattle on the Little Cattle Company Ranch north of Middleton. Cattle prices are down now like many Idaho crops but without international trade the bottom would drop out of most farm markets.
Cattle on the Little Cattle Company Ranch north of Middleton. Cattle prices are down now like many Idaho crops but without international trade the bottom would drop out of most farm markets. doswald@idahostatesman.com

As he promised in the campaign, President Donald Trump dumped the Trans-Pacific Partnership trade agreement, pleasing his supporters and labor leaders.

He already has promised to renegotiate the North American Free Trade Agreement, underscoring his view that he alone can cut better deals than the Republicans and Democrats who’ve come before him. Rural Idaho voted overwhelmingly for Trump, and many of the small-town folks I’m talking to at the Capitol tell me they are excited with his agenda to cut regulations.

But several ranchers showed less than enthusiasm about the Trump trade agenda.

“ ‘America First’ doesn’t work for the beef industry,” said Wyatt Prescott, a rancher who is working again this winter as a lobbyist for the Idaho Cattle Association.

Ranchers produce far more beef than Americans eat. The expensive cuts like Snake River Farm’s American Wagyu and Kobe steaks and roasts are largely aimed at export markets. Idaho exports more than $2 billion in agriculture products, more than a fifth of all of the state’s production.

NAFTA cut tariffs and trade barriers between the United States, Canada and Mexico, and it’s hard to argue that Idaho wasn’t among the winners. Idaho sold $977 million worth of products to Canada and $264 million to Mexico in 2015.

Since the deal went into effect in 1994, exports to the two neighbors have grown by 800 percent. Since our tariff into Mexico dropped to next to nothing, our southern neighbors have become our largest farm product customers. One-quarter of all of our agriculture exports now go to Mexico. Canada, our top overall trade partner, buys 19 percent of our farm goods.

Asia has been a growing market for Idaho farmers and timber companies. Indonesia bought over $25 million worth of dairy products and China is buying whey and hay. Japan purchased $64 million worth of paper products from Idaho in 2015. China also buys timber, paper and pulp.

“We’re a nation that grows way more commodities than we need here,” said John Thompson, public affairs director for the Idaho Farm Bureau. “We need to trade.”

Despite the importance of trade overall to Idaho agriculture, many smaller farmers who are members of the Farm Bureau sell closer to home. For them, Thompson said, “Being a part of the global economy is less important.”

So his members are split on issues such as NAFTA, and they probably know what they’re talking about when it comes to trade’s effects. Many North Idaho Farm Bureau members, for instance, link NAFTA to the decline in the timber industry in their communities.

The whole story is more complicated. The industry was affected not just by NAFTA but a longstanding trade dispute with Canada.

Back when American timber companies were cutting up to 9 billion board feet of timber in the Pacific Northwest, British Columbia’s industry sagged and the province propped it up with cheap prices for trees to keep its rural communities alive.

Those prices undercut the market and the U.S. timber industry. Companies like Boise Cascade, already facing supply issues because of environmental fights, were forced to close mills across the region.

The Softwood Lumber Agreement in 2006 resolved the dispute, but that agreement ended in 2015. Canadian imports have been rising.

If Trump wanted to demonstrate his powerful negotiating skills, he could cut a more favorable deal on a new softwood timber agreement with Canadian Prime Minister Justin Trudeau. He even could have the talks take place here in the Pacific Northwest to demonstrate to rural residents that he cares about their problems.

That would follow the example of President Bill Clinton, who held his Northwest Forest Conference in 1993 to try to resolve the spotted owl and old growth forest dispute. He had mixed results, but it would be hard to dispute that the economies of Oregon and Washington are far better off today than they were then. If you live in John Day, Ore., or Forks, Wash., however, making that case likely would start a fight.

But there is no doubt that if the Trump administration triggers a trade war, Idaho will be one of the biggest losers.

Rocky Barker: 208-377-6484, @RockyBarker

  Comments