Tariffs cited as concern on trade

Womack pushes for market access

ROGERS -- U.S. Rep. Steve Womack said Monday that if he were "whipping" the state's congressional delegation for votes, there would probably be a mixed reaction to the proposed new trade deal among the U.S., Mexico and Canada.

Speaking Monday at the Arkansas World Trade Center in Rogers, Womack predicted a mixed reaction because of a few trade unknowns -- primarily, "we don't know exactly what's going to happen with steel and aluminum.

"And that of course does affect at least one of our districts in a pretty profound way, that being the 1st District," he told business owners. The 1st Congressional District includes the steel mills of Mississippi County.

Womack, a Republican and former mayor of Rogers, will be in Arkansas this week talking about the trade deal, which is awaiting votes from each chamber in Washington.

In Arkansas, the proposed deal would support farmers and producers who've lost access to vital markets because of retaliatory tariffs in response to U.S. tariffs on metal and steel imports. The current proposal does not address metals tariffs imposed by Canada or Mexico. Under the North American Free Trade Agreement, all tariffs were eliminated with few exceptions in 2008.

"If we don't have access to those markets, if the costs go up too high ... it's either sell it or smell it," Womack told attendees, meaning that without market access, U.S. products stockpile and drive prices lower.

"At the end of the day, we all know that farm income is pretty important to our state," he said, estimating that farm incomes will continue to decline without a trilateral trade agreement, causing people to leave the business.

"We don't want to see that happen," he said.

The trade deal was drafted to replace NAFTA, enacted in 1994. Since then, Arkansas exports to Canada have increased to $1.3 billion in goods, and another $851 million in goods to Mexico, as of 2017, according to data with the Arkansas World Trade Center.

"We export really twice as much as what we import from Mexico and Canada," said Melvin Torres, director of Western Hemisphere trade, during a presentation on what the new trade deal would offer the state.

Over one-third of Arkansas exports go to Canada or Mexico under NAFTA, data show. Canada is the largest customer, comprising 20 percent of the state's exports, followed by Mexico, comprising 14 percent.

The largest buyer of Arkansas agriculture products such as rice and poultry is Mexico.

A few area business owners who traveled to Queretaro, Mexico, this month for a trade conference were in attendance Monday and discussed the recent effects that certain trade squabbles have had on their businesses and what they should brace for with the proposed new agreement.

Flip Kindberg of SkyGenie assembles and manufactures equipment in Fort Smith and sells products for different scenarios, including high-rise window cleaning. Because of the metal tariffs, he said he's had to absorb some of the raw material costs.

A chemical company out of El Dorado, Lycus, manufactures ultraviolet light absorbers used in plastics, coatings, windows and other products. Some of the company's raw materials come from China because there isn't enough supply in the U.S., said Tasha Sinclair, vice president of Lycus.

If the U.S. were to implement additional tariffs on Chinese goods, originally supposed to take effect March 1, "it would hurt us real bad," she said.

"We always try to buy if it's produced in the states, but these products we're buying aren't even produced in the states," Sinclair said.

What the new U.S.-Mexico-Canada Agreement would do is establish certainty for business interests, Womack said.

"What certainty does is give people a chance to plan," he said.

The proposed deal would establish updated trade policy related to labor provisions, rules of origin, intellectual property and digital commerce, among others. It also yields good news for agriculture, which generates billions of dollars for Arkansas, by expanding market access for U.S. poultry and eggs. According to an analysis published last week by the U.S. International Trade Commission, poultry meat exports would increase by almost 50 percent to $183.5 million.

While in Northwest Arkansas, Womack told the Arkansas Democrat-Gazette, he plans to visit with Tyson Foods to see if the company is interested in talking with Kevin Whitaker, the U.S. Ambassador to Colombia, about economic development opportunities regarding poultry production.

"This will come as news to Tyson because I haven't had a chance to talk with them yet," he said.

Business on 04/23/2019

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