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NDTO News Article

Recent Free Trade Agreements & Effects in North Dakota

The United States currently has free trade agreements (FTAs) with twenty countries. Most recently, the US signed FTAs with Peru, South Korea and Colombia. These three FTAs have resulted in an increase of exports from the United States as well as from North Dakota. As free trade agreements are currently under the microscope, we took a look at the effects of these recent FTAs on North Dakota’s exports.

The US-Peru free trade agreement went into effect on February 1, 2009. Since that year, total exports from North Dakota to Peru have increased by 817% with $9.3 million of goods sold in 2016, becoming the 22nd largest export market for North Dakota. The most recent jump has been in food manufacturers selling dried vegetables, which was the number one North Dakota export to Peru in 2016 at $5.2 million. Machinery has also seen a marked increase with the sale of self-propelled dozers going from $865,000 in 2009, peaking at $6 million in 2012 and settling to $2.4 million in 2016.  Dried legumes have jumped from zero in 2008 to about $2 million in 2011 and 2015, then almost $600,000 in 2016.

South Korea is now North Dakota’s 13th largest export partner. The US signed a free trade agreement with South Korea in March 2012 and that year North Dakota saw its exports to the Asian country nearly double. Self-propelled dozers have experienced the largest increase and have comprised the majority of the state’s exports to Korea. There has also been an increase in malt extract, going from zero in 2011 to $524,000 in 2016. Soybeans have increased from $24,000 in 2012, to a peak of $1.7 million in 2014 and to $515,000 in 2016. Compression-ignition engines, flaxseed and pasta have also increased significantly since 2012.

Colombia is North Dakota’s 19th largest export partner, achieving a 182% increase in exports since the Colombia free trade agreement went into effect in May 2012. Dried legumes have seen an increase of 1,902% since 2012, no doubt the result of the NDTO’s four trade missions to Colombia since 2012. Corn was the state’s top export to Colombia in 2016, at $4.8 million, though previous years have seen no corn exports. Wheat and meslin have seen increases since 2012 with sales going from $547,000 in 2012 to $2.9 million in 2016.

Overall North Dakota has achieved significant increases of exports to these three countries after an FTA was signed. As the current administration examines free trade agreements, North Dakota beneficiaries must voice the necessity of FTAs for their business.