Trade Deals Vital to South Dakota and Sioux Falls Economy [OPINION]

There are very few federal policies that affect actual life on the ground in South Dakota more than trade agreements. We all know that our fortunes here, in terms of economic growth and the state budget, are tied directly to agriculture.

And the fortunes of agriculture are tied directly to international trade.

South Dakota and the city of Sioux Falls have both experienced flat sales tax for the past couple years. This is a direct result of a decrease in commodity prices.

This is not in question. We can talk about internet sales stealing business all we want – and it’s true – but it’s selling grain and livestock that drives our economy more broadly.

Increasingly that’s meant selling our products internationally. That has been a talking point for Republican governors of South Dakota going back a couple generations.

That hasn’t changed.

Yet, here we are poised to tear up the North American Free Trade Agreement after already turning our backs on the Trans Pacific Partnership.

Where does South Dakota sell goods? Canada, Mexico, China, Japan, Australia.

What do we export? Soybeans, Corn, pork, beef.

The first non-commodity on our list of exports is front-end loaders, which I think is pretty much all out of Madison at Gehl, which is also ag related, among other things.

NAFTA has been very good to us over the years. Very good. The Trump administration is in the midst of renegotiating the agreement with Canada and Mexico and the rhetoric is getting pretty strong. All we hear about is manufacturing, that we’re going to make things again. What about ag? I’m not hearing anything about ag. President Trump says NAFTA is the single worst agreement ever negotiated by any country ever.

What does that say about farmers? South Dakota is facing serious financial issues if the ag economy doesn’t start to see better growth. How does this negotiation affect South Dakota? I’m not certain. Our congressional delegation has not offered much insight and they certainly haven’t publicly pushed back against the president’s rhetoric.

I’ve said this before, so it’s not a surprise, but rejecting TPP was a major set back for livestock producers in South Dakota in that it would have drastically reduced tariffs on meat exports in much of Asia. Let’s be clear here: China was not in the TPP. What we did by getting out was give a huge gift to Australia, Brazil and Argentina. They’re happy to sell cattle and pigs in Asia. Meanwhile, back in the United States, Americans have steadily eaten less beef and pork over the past 15 years. That number is projected to grow but the real potential is in Asia.

In addition, let’s be honest, the Trump Administration is no friend of renewables, opting instead for domestic oil exploration and production. That doesn’t portend well for a state where fully one-third of all corn production goes to ethanol.

America First? On the long odds that the tough talk trade policies and tax cuts of the Trump Administration actually mean a growth in manufacturing in Ohio and Michigan; that American corporations will defy actual economic principles and provide good jobs and increase wages to a substantial degree; that other countries such as China and Germany and India are going to acquiesce to the threats and tariffs to do what’s in best interest of the United States; to the degree that any of that will happen, won’t do a lick for South Dakota.

Not really.

We need free trade in South Dakota, the kind of trade we’ve been building for the past 30 years, if we hope to be able to provide basic services for our citizens. Things like schools, roads and an adequate social net for children.

Without those things, we won’t grow, we cannot build a competitive workforce for the next three generations.

Continuing on this slash and burn philosophy of trade is bad for South Dakota and bad for Sioux Falls.

I for one, would like to know what our elected officials are going to do about that.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official policy or position of Results Radio, Townsquare Media, its staff, contributors, affiliates or advertisers.

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