Hagedorn Hype : Spending OUR Taxdollars to tell us how great 2018 was

Jim Hagedorn must be thinking it is time to pull the old campaign lawn signs out and alert Minnesota’s First District that he will be running again in November.

The big difference between his 2020 campaign and his unsuccessful 2010, 2014, and 2016 campaigns (before winning in 2018 when Tim Walz decided to seek the governorship), is that he is an incumbent. As a Member of the House of Representatives, Congressman Hagedorn has a Franked Mail priviledge. And in his first year in Congress, Congressman Hagedorn has found Franked Mail to be quite a benefit. Actually, just in the July 1 – September 30, 2019 reporting period, Congressman Hagedorn sent out 60,659 pieces of mass mailings at a taxpayer cost of $21,669.59. That’s just in one quarter !

So, it was on Saturday, that my mailbox got its first Franked Mail of 2020 … a flyer featuring a smiling Jim Hagedorn and the message that the United States – Mexico -Canada Agreement will “Expand Minnesota’s Economy”.

Like many political mailers, it’s always a good idea to check for footnotes … in other words, where did they get the information.

In this case, Congressman Hagedorn stated it was provided by the US Trade Representative <source https://ustr.gov/map/state-benefits/mn> … which can be confirmed by the MN Department of Economic Development <source https://mn.gov/deed/data/export-stats/current-past>. Turns out that although the flyer suggests that the USMCA will expand business for Minnesota, he is just reporting the old NAFTA exports data for 2018 — Canada was $4,802 million and Mexico was $2,362 million. [2019 data has not been released yet, but based on the first nine months of 2019, it appears that Minnesota exports to Canada will be less than 2018 and slightly more exports to Mexico.]

For those that have not been paying attention to the history of the USMCA trade deal, it is a response to candidate Trump’s complaint that the old NAFTA trade deal was the “the worst trade deal ever made” … so on November 18, 2018, President Trump announced that he had a framework for a new deal. Many have reviewed the proposal and found it to be minor tweaks … but that doesn’t stop the hype.

Finally, on December 13, 2019, the Trump Administration submitted to Congress the proposed USMCA implementing legislation. On the same day, the United States-Mexico Canada Implementation Act (H.R. 5430) was introduced in the House of Representatives and the full House approved the bill on December 19, 2019, by a vote of 385-41.The Senate approved the legislation on January 16, 2020 by a vote of 89-10 … and it is now waiting for President Trump to sign it. The President will have to inform Congress when the USMCA will take effect. It could take a year before the USMCA will be in effect (presuming that the Canadian Parliament approves it).

Congressman Hagedorn fails to tells us how much more business Minnesota is likely to experience … just that it “helps”.

For example, Congressman Hagedorn states that the USMCA will open Canadian markets to Minnesota dairy.

Sorta, a little misleading … the Brookings Institution, a Washington, D.C., nonprofit that conducts in-depth research on policy, claims the new deal will increase U.S. market share in Canadian dairy products from 3% to 3.59% or about 0.2% of total U.S. dairy industry revenues.

OK … so 0.2% may not be a lot … but at least it’s something … too bad that Congressman Hagedorn does not state that United States agreed to expanded import quota levels for Canadian dairy and sugar products. Hmmm … so what may help some dairy producers, may harm sugar producers. Also, if more US product leaves the domestic market, that could result in an increase in US milk prices, and therefore consumers will pay higher prices.

Yeah, trade deals are not one sided … and sorta explains why Mexico was the first to approve the deal … it will see wages grow for auto workers (up to $16 per hour) … The Center for Automotive Research (CAR) estimates that the effects of the USMCA, roughly 366,900 domestic jobs would be lost, and that the price of cars in the U.S. would increase by $2,750 … that was after a 2.7% increase in vehicle prices in 2018.

Actually, you would be hard pressed to see any reason for US manufacturers not to continue building more products in Mexico …. that “sucking” sound will continue.

Another fact that Congressman Hagedorn does not state is how much Canada and Mexico import into America.

For example, as stated by Congressman Hagedorn, Canada reported $4.8 Billion in exports from Minnesota in 2018 … but he does not mention that in 2018, Canada reported $9.6 Billion in exports to Minnesota. <source https://www.tradecommissioner.gc.ca/tcs-sdc/united-states-of-america-etats-unis-amerique/business_fact_sheets-fiches_documentaires_affaires.aspx?lang=eng> Even the “official” analysis of the preliminary agreement by the United States International Trade Commission issued February 12, 2019 stated that the trade balance between America and Canada was a wash … both countries importing and exporting the same $19.1 Billion. In fact, their analysis states that the overall benefit to U.S. GDP is small — a 0.35 % increase in the agreement’s sixth year.

In summary, there is too much unknown to proclaim this to be a major win for Minnesota … but expect Congressman Hagedorn to hype it long before its provisions take place in 2021 (which will be long after the November election.)

What Jim Hagedorn wants is for voters not to ask about the details … nor ask why we are paying for mailers that will end up going into some landfill when he could just pass the information along in an email (which the taxpayers are paying for already as part of his Members’ Representational Allowance ).