Minnesota businesses uneasy with campaign's anti-trade rhetoric

At a cattle conference last week in Alberta, Canada, Minnesota Farm Bureau President Kevin Paap fielded the same question over and over:

How did international trade become such a bad thing in the United States?

Paap, who exports part of his soybean and corn crops each year, had no good answer.

As Republican presidential candidate Donald Trump makes sacking two of the country's biggest free-trade agreements a part of his economic plan, Minnesota's business community finds itself at odds with the top candidate of a political party that once was a reliable supporter of open markets.

"What we're hearing from candidate Trump are things that are not in line with what we need in agriculture," Paap said.

Minnesota's other critical business sectors don't want the trade policy Trump is selling, either.

For the past half-century it has been "unprecedented for Republicans to be in favor of protectionism," said Robert Kudrle, an economist who specializes in trade and international investment at the University of Minnesota. "Almost all the time protectionism has been on the trade-union left within the Democratic Party. Now, it's just very, very different."

Democratic presidential candidate Hillary Clinton once supported TPP, but now says she's against it. Her running mate, U.S. Sen. Tim Kaine of Virginia, voted for so-called fast-track legislation that allows Congress an up-or-down vote on TPP, but no changes. Kaine now says he opposes a vote on the trade agreement before the end of the year.

The trade war has caused one Minnesota Republican, Third District Rep. Erik Paulsen, to break ranks with Trump.

"We should not step away from the table on agreements such as TPP," Paulsen told the Star Tribune in a statement. "The benefits that thoughtful trade agreements can bring to American businesses, their employees, and their families are too important to ignore."

Kudrle thinks presidential politics threatens relationships between Minnesota and its major trading partners — Canada, Mexico and Japan. All of them are party to TPP.

Most of Minnesota's big business leaders declined to talk to the Star Tribune about the candidates' stands on trade. But state-based companies shipped $20 billion worth of goods to 200 countries in 2015. The top 25 countries receiving those goods included eight TPP participants. Many of the major corporate players in Minnesota have endorsed TPP either individually or through their trade associations.

Cargill and 3M are part of a coalition of businesses working to pass TPP.

"Trade lowers prices for consumers, increases income for farmers and provides American businesses an equal playing field," a Cargill spokesman said in a statement. "Our company's ability to achieve our goal of nourishing the world by accessing and competing in [trans-Pacific] markets depends directly on whether or not the TPP is ratified."

General Mills has a seat on the board of the U.S. Council for International Business, a leading member of the coalition to pass TPP. Medtronic and St. Jude Medical are members of the Advanced Medical Technology Association (AdvaMed), which is pushing TPP.

The Minnesota Chamber of Commerce has encouraged its members to make their feelings about free trade clear to candidates in a political season where international trade has taken a higher campaign profile than usual. State Chamber President Doug Loon calls trade "a front-burner issue."

"Moving toward a trade protectionist agenda is not the answer to our economic challenges for the country and certainly not for Minnesota," he said, noting that foreign exports support 800,000 jobs in the state.

Republican Rep. Tom Emmer has not yet said if he will vote for TPP.

Among Democrats, Reps. Keith Ellison and Rick Nolan vociferously oppose the pact, saying it will cost Americans jobs and lead to human rights violations of foreign workers. Sen. Al Franken has come out against TPP, as has Rep. Betty McCollum. Sen. Amy Klobuchar has not decided whether to support the trade pact, nor has Rep. Tim Walz.

Loon thinks Minnesota's business voters will base their election choices on a variety of issues.

"Trade is one of many things that they will consider," he said. They will also look at "how the candidates come down on tax policy, how they view regulations, how they view immigration.

Trump's plan to deport immigrants in the country illegally does not play well in some corners of the state's agriculture sector. The farm bureau's Paap said immigrants provide a vital labor force for raising animals and growing crops in Minnesota.

"To say to American big business that you're going to cut the tax rate, but you're also going to really start bollixing up international markets — I don't think people would want to trade those off," he said.