Two Arkansas export leaders are hopeful that new negotiations with international trade agreements can result in better deals for Arkansas and the U.S.
Appearing on the latest Talk Business & Politics Daily, William Burgess, chairman of the Arkansas District Export Council, and Christine Russell, who guides marketing for the council, said that NAFTA, TPP and other free trade agreements can be improved.
President Donald Trump scrapped a pending agreement with Asian nations in the Trans-Pacific Partnership (TPP); he’s served notice that the North American Trade Agreement (NAFTA) should be revisited; and he’s rolled back some of the Obama administration’s warming of relations with Cuba.
Burgess, VP of Operations for laser manufacturer Power Technology, Inc., said after 20 years of NAFTA, it’s time to review changes.
“I’m all in favor of that. I think what’s important is we have to make forward progress on free trade agreements,” he said. “What I think is important is we’re crafting NAFTA 2.0 after the progress that we made in TPP. So, NAFTA’s not really a step back as much as it is taking what worked in TPP and now applying it to our closest and best partners.”
“NAFTA was drafted in the early 1990’s. Do you remember the computers in 1990?” asked Russell, an executive with freight and logistics shipper Kuehne + Nagel, Inc. “Where our technology, everything has changed so much. If we’re going forward and with those changes, we definitely need to develop that for the time that we’re in now.”
Neither Burgess nor Russell believe that Trump’s decision to rework TPP will kill an eventual deal.
“You know, while the agreement was scrapped, China hasn’t stopped negotiating free trade agreements,” Burgess said. “They have finalized 12 regional free trade agreements and they’re working on six more just in the last five to six years.”
“I think that it’s going to take a little time and I think that also the negotiations, and you know, even from the very beginning of the statement being made that we were going to do that to now, that relationship is already building. So, I hope that the good change will come out of it,” said Russell.
While Canada and Mexico are Arkansas’ largest export trading partners, the two executives think Cuba still holds potential for the state’s agriculture community and beyond.
“I think there’s trade in a lot of technology that could go down there. There’s a lot of things to help that country grow in that sense, but we have to be able to open up that barrier,” said Russell, who noted that credit restrictions are still the biggest barrier to Cuban trade, even after President Trump’s recent pronouncement to reverse some of the Obama administration’s thawing of Cuban relations.
“Certain countries in the world give 120-day trade credit to Cuba, to their customers in Cuba,” noted Burgess. “It’s very hard to compete when somebody will finance your purchase for 120 days versus zero days from the United States. So, I think we need to open up our financial transactions with Cuba.”
Exports from Arkansas totaled more than $5.7 billion in 2016, according to statistics from the U.S. Census Bureau. Over the past four years, Arkansas exports have topped $25.6 billion.
For more information on the Arkansas District Export Council, click here. Watch their full interview in the video below.