Iowa could lose thousands of jobs with NAFTA pullout. But is the hit 4,900 or 138,000 jobs?

How big of a hit will Iowa take if the United States terminates its trade agreement with Canada and Mexico, the state's top export markets?

A new report says Iowa could lose 19,300 jobs. That's about 70 percent of the jobs Iowa added in 2017.

President Trump has repeatedly threatened to leave NAFTA, the North American Free Trade Agreement, as negotiators try to hammer out a new deal.

The hit to Iowa's economy could reach $1.2 billion, according to the study completed for Business Roundtable, a group of corporate CEOs that include Walmart, Boeing, JPMorgan Chase and GM.

Iowa exports would drop 28 percent, hammering the state's grain, meat, construction and equipment industries the hardest, the report says.

Iowa is the national leader in corn, pork and egg production. It ranks second for soybean and seventh in beef production.

It's also home to large farm machinery manufacturers, including Deere & Co., Vermeer Co. and Kinze Manufacturing.

"Folks in Iowa are making it clear to the administration and stakeholders in Washington just how dependent their economies are on trade with Mexico and Canada," said Neil Herrington, a senior vice president at the U.S. Chamber of Commerce.

Iowa and other states that were key to President Trump's election are "extraordinarily dependent on NAFTA," said Herrington, whose group released its own analysis.

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The chamber is hosting a panel discussion on NAFTA on Friday in Des Moines, along with the Greater Des Moines Partnership, the Iowa Association of Business and Industry, and the Iowa Farm Bureau Federation.

The U.S. Chamber's report show Iowa is "at risk" of losing 138,000 jobs that depend on trade with Canada and Mexico.

It ranks Iowa seventh nationally among states that would be hurt by a U.S. withdrawal from the agreement.

Michigan ranks first in losses, primarily related to auto manufacturing.

"Nearly half (47 percent) of Iowa’s exports are destined for customers" in NAFTA markets, generating more than $5.6 billion in export revenue, the group says.

But David Swenson, an Iowa State University economist, said the jobs impact, while harmful, is unlikely to be as deep as the trade advocates calculate.

Even with lower prices and contraction in agriculture and manufacturing, Iowa's job loss would be about 4,900, based on an economic impact model Swenson uses.

"And that’s if all of this production went away," which wouldn't happen, he said.

"The world's demand for these commodities hasn’t changed ... what’s changed is the terms in which we're trading for them with our partners," Swenson said.

"It doesn't mean these goods wouldn't be sold on worldwide markets, including Mexico and Canada," he said.

Even with potentially higher costs to import U.S. pork, corn or other commodities, Mexico would still likely look to Iowa, because it's a leading industry producer with low costs, he said.

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"I don't deny that these are the categories that will be vulnerable on the price side," Swenson said. "But it's difficult to predict the severity of the price impacts."

"These products will find a market. We have corn. People like corn. We have pork. People want pork. We've got tractors. People are going to buy them," Swenson said.

Farmers fear the U.S. will pull out of the NAFTA trade deal even as negotiators try to hammer out a new deal.

Roger Johnson, president of the National Farmers Union, said his group supports efforts to modernize NAFTA, given its concerns about the pact's trade dispute resolution and the U.S. trade deficit.

A report this week showed the U.S. trade deficit with Mexico reached $71.1 billion in 2017. The U.S. had a trade surplus of $17.6 billion with Canada, based on U.S. Commerce Department data.

But Johnson said the group is concerned about President Trump's tactics in negotiating a new deal — and in his comments about Mexico.

"We don’t understand how our negotiating hand is strengthen by repeatedly offending the people of Mexico, the governing bodies in Mexico — belittling them, demeaning them, disrespecting them. Then thinking, let's sit around a negotiating table and make a deal," Johnson said in a recent meeting with the Register.

Even though the group supports a new deal, Johnson said pulling out of NAFTA would be "extraordinarily disruptive. ... Having this constant threat of pulling out is not helpful to negotiators."

Johnson said Mexico is buying corn from Brazil, "not because it's cheaper, but because they're so offended. They don't want to be stuck with a single trading partner."

"That's working against the objective" to sell more products to Mexico, Johnson said.

The U.S. Chamber said that without NAFTA, Mexican tariffs could "rise from zero to 10 percent on pork, 25 percent on beef, 75 percent on chicken, and 75 percent on high fructose corn syrup, a major Iowa export to Mexico."

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But David Miller, research director at Iowa Farm Bureau Federation, questions whether Mexico would impose tariffs that would increase food prices for its residents.

Still, the uncertainty around a possible withdrawal could send corn, soybean, pork and beef markets tumbling, at least temporarily until Mexico, primarily, signaled whether it would impose tariffs.

Miller said commodity prices could drop 10 percent before rebounds to a more normal market.

He believes the interdependence of agricultural trade will keep the U.S. and its trade partners at the table. "All sides would be significantly hurt," he said.

It's not just farming that would be impacted. Manufacturing also would get hurt.

About one in five jobs in Iowa is tied to either ag and ag-related manufacturing.

And Iowa is seeing a recovery in manufacturing, with 11,700 production jobs added last year.

Even with the gains, the industry hasn't recovered all the jobs lost during the 2008 recession.

Since NAFTA's start 25 years ago, Swenson said U.S. manufacturing has suffered losses because plants have located in Mexico.

But the biggest losses came from a shift in manufacturing to Asian countries, including China.

Losing NAFTA "would be negative to farming and to manufacturing, but not disastrous" to the Iowa economy, Swenson said.