Ag Markets, Trade Are Crucial in Third District As Election Day Nears

(Graphic by Lisa Craig, NET)
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October 10, 2018 - 6:45am

Nebraska’s 3rd Congressional District encompasses 68 counties and nearly 65,000 square miles. As a part of our Campaign Connection 2018 coverage, we look at a few of the issues facing the candidates in the race to represent the district: incumbent Adrian Smith and challenger Paul Theobald.

Nebraska’s 3rd Congressional District seat covers more than three-fourths of the state’s landmass and is the largest ag-producing district in America. It’s a lot of space to cover for one congressman. Incumbent Republican Adrian Smith has served the 3rd District since 2007. He says his constituents in the district are focused on trade – more specifically tariffs – and agricultural markets. Smith says the pattern the past several years in the House of Representatives has been to reduce tariffs.

Adrian Smith on the USMCA Trade deal between the U.S, Mexico and Canada:

“I’m very pleased to hear the administration has come to an agreement with Mexico and Canada to update NAFTA with a new US-Mexico-Canada Agreement (USMCA) which builds on its successes. I have long supported a three-country agreement because it is vital to Nebraska’s agricultural producers and to our rural economy. I look forward to considering USMCA as Congress studies the details and I commend President Trump’s team for their success in reaching this point.”

Paul Theobald on the USMCA Trade deal between the U.S, Mexico and Canada:

"Following the great American tradition of presidents renaming programs begun by prior presidents, Trump announced that NAFTA is dead and that the USMCA will take its place. As far as the ag industry goes, it changes little, although the dairy industry will get a bit more of the Canadian market (a development of so little consequence that it didn't budge the U.S. milk market). The concern of Nebraska ranchers, Canadian and Mexican feeder cattle imports, didn't even come up in the negotiations. Details remain to be ironed out--and no one can say at this point how the overall agreement will function. One thing we do know is that Donald Trump is all about optics. We can hope for the best here, but in terms of agriculture, it appears to be just that, optics. Break the agreement in order to be the hero who fixes it. We've seen it before."

"Many of my colleagues who have voted against trade agreements – trade agreements reduce tariffs generally – well now they're opposed to tariffs," Smith said.

Smith says he sees that as a good sign.

"Let's have this discussion," he said. "I think we're having more substantive discussions on trade now, let's move forward hopefully with some bilateral trade agreements. I introduced a resolution calling for a bilateral trade agreement with Japan for example."

Smith says he isn’t sold on the idea that bilateral agreements are the only way to conduct trade. He says when it comes to trade, many experts are worried about how China fits into America’s plans long-term.

China has long been America’s top soybean importer, accounting for 57 percent of total soybean exports. However, in retaliation to the tariffs President Trump put on Chinese goods, China has placed a large tariff on U.S. soybeans. Last month, Chinese soybean exports from America dropped nearly 95 percent – which took China from #1 on the soybean export list to #18. As for multilateral agreements, Smith uses the Trans-Pacific Partnership – which President Trump withdrew the U.S. from – as an example of a good plan.

"An agreement with 12 countries – not including China – would be a way for us to help address the inequities of China's policies and China's actions," Smith said.

He says many people he’s spoken with during campaign stops have had issues with trade and the ag markets. Smith says it’s good the NAFTA agreement between the U.S. and leaders from Mexico and Canada has been reworked. He says the new proposed United States-Mexico-Canada Agreement, or USMCA, is vital to Nebraska’s ag producers.

Smith’s challenger is Paul Theobald, an educator and hog-farmer from Pierce County. Theobald says the USMCA changes little, although the dairy industry will get a bit more of the Canadian market. He says the concern of Nebraska ranchers, Canadian and Mexican feeder cattle imports, didn't even come up in the negotiations.

Under the agreement, 75 percent of automobile parts must be made in the U.S., Canada or Mexico to qualify for no tariffs – that’s up from the 62.5 percent NAFTA required. Also, 30 percent of work on a car must be completed by workers who are making $16 an hour and this figure jumps to 40 percent in 2023.

Dairy Farmers are also impacted by the agreement. Smith has long scorned the protectionist moves by the Canadian government in shielding their dairy markets from American dairy. The USMCA will limit how many dairy products Canadians can export. Among other changes, the 25 percent steel tariffs on Canadian steel isn’t going anywhere.

Theobald is critical of President Trump’s overall ag policy.

"Pretty hard to find anybody out there that has much confidence in this administration as it relates to agricultural policy," Theobald said.

Theobald says with lagging ag markets – the price of soybeans has fallen by $2 per bushel since spring – the tariffs have been a big blow to farmers and ranchers in the 3rd District.

"So, on top of that with this tremendous blow, with the loss of markets it's a very gloomy horizon for the agriculture industry and they're not happy about it," Theobald said.

Theobald says the $6 billion ag bailout President Trump announced recently was “slapped together” and he thinks it could’ve been done in a better way.

"By asking the USDA to buy millions of soybeans and then they in turn could have turned around and sold them to China – at discounted prices obviously because of the tariffs – but that would have had the effect of actually stabilizing the price of beans, but more importantly, stabilizing land values," Theobald said.

Theobald called the bailout a token gesture.

"Six to 8 weeks prior to the announcement of the $12 billion in aid just soybeans and corn – if you put those two together – they lost $18 billion in value. We're talking about something here – $12 billion is pretty much a drop in the bucket," Theobald said.

Theobald says constituents in Nebraska’s 3rd District are sharp and know when something isn’t right.

"I don't think there has ever, ever been a president who's been as openly hostile to rural America as this one," Theobald said.

Smith disagrees about what Theobald calls Trump’s “open hostility.” He says ultimately tariffs hurt rural Nebraskans, farmers and consumers. But says he was very proud of the work that went into the tax reform bill signed into law by President Trump this year.

"So the wage earners who through tax reform got some benefits with the doubling of the standard deduction," Smith said. "That's a good situation."

Smith says he didn’t anticipate the results showing up as soon as they did.

"I did not anticipate that 30 days into the new year, a new policy, that there would be literally hundreds of companies announcing wage increases, bonuses, pension enhancements," Smith said.

Theobald says the tax bill doesn’t help farmers if they aren’t making any money through wages.

"We have got to have a Congress that will shoulder its responsibility to be a check on executive overreach and we don't have that right now -- but we can have it after November," Theobald said.

With the exception of his first race for the 3rd District seat – when he won 55-45 – Smith has never received less than 70 percent of the general election vote. As of the end of September, Theobald’s campaign had a little more than $43,000 on hand, while Smith’s campaign had $1.02 million.



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