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Trade Wars

This is part seven of an eight-part series on trade and how changes in policy might affect the local economy.

If the Trump Administration upsets the trade relationship with Mexico, our southern neighbors are already threatening retaliation with tariffs of their own on corn, and turning to South America for one of the country's food staples in what is already dubbed a "tortilla war."

Craig Yunker, CEO of CY Farms, said such a move, especially at a time of a strong U.S. dollar, would certainly hurt local farmers. 

"The GLOW region's economy is highly dependent on agriculture," Yunker said. "Agriculture is highly dependent on exports. A trade war coming out of anti-trade comments and tweets will put our regional economy at risk."

Rep. Chris Collins said he isn't worried about a trade war. If there is one, he said, it would be short-lived because other countries need us more than we need them.

"No one wants to use the word war in any sentence," Collins said. "What I would remind people is that if there is a war, we'll win the war."

The calculation Collins looks at, he said, is "four and 25," meaning the United State has 4 percent of the world's population and accounts for 25 percent of the world's economy (Collins and I had some discussion about this number. I told him it was 15.8 percent, but that turns out to be a number adjusted for something called purchasing power parity, which adjusts for exchange rates; the current nominal rate is just over 25 percent.

While on the campaign trail, Trump spoke frequently about the $346 billion trade deficit with China; there are some factors that raw number leaves out. 

First, much of the $115 billion the U.S. exports to China goes over as raw goods and comes back as more expensive, manufactured goods.  

Second, the U.S. GDP per person is $51,638. That is higher than any other major nation and much higher than China, at $6,497, (and much higher than our other major global rival, Russia, at $11,615. That means U.S. consumers have more money to spend on products, meaning more demand for products. Of course, it also means the cost of labor in China is much lower than in the United States.

While the GDP per person is low in China, it has grown substantially over the past two decades. The number of people living below the poverty line in China has fallen from 750 million in 1990 to less than two million today. Free trade has been good for China, which is probably why the communist president Xi Jinping has become a champion of open markets.

“Pursuing protectionism is like locking oneself in a dark room,” Jinping said. “Wind and rain may be kept outside, but so is light and air.”

These are among the reasons, Collins argues, that China needs the United States, which makes a trade war unlikely.

"What happens if China loses access to U.S. consumers?" Collins said. "It's going to be anarchy over there. On the agricultural front, I would hate to see that happen, but that also begs the question of supply and demand. We're a big supplier. What's going to happen to the price of corn if all that corn comes out of the market? They're going to start raising prices."

What's known of Trump's trade plans is that he plans to focus heavily on deficits with each trading partner even though trade deals usually lower barriers with trade partners more than they lower our own already low duties. There's also some concern that Trump might want to pull the nation out of the WTO, a move many economists believe will only weaken the United States as the rest of the world moves on with free trade without us.

While Jim Campbell, CEO of Chapin, supports new trade deals that help U.S. manufacturing, he doesn't think the United States should turn to a more protectionist stance.

"The one thing we can all agree on is protectionism doesn't work," Campbell said. 

It didn't work for America, or the world, during the Great Depression, when Congress passed the Smoot-Hawley Smoot–Hawley Tariff Act, a contributing factor to making a bad recession worse.

"We still need some free trade," Campbell said. "We need fair trade."

Fair trade: Most business leaders we spoke to for this series, even most of the strong free-trade advocates, have some complaint about how seemingly unfair trade practices of other countries hurt their businesses. Dean Norton, former president of the NY State Farm Bureau, acknowledged the provincial dairy protections of Canada. Local farmer Maureen Torrey noted there are some crops her farm ships to Canada only rarely. 

John DeLuca, sales manager for Liberty Pumps, said he just returned from Indonesia, which charges a duty on U.S.-manufactured pumps entering their country, but there is no duty on pumps entering the United States.

Jeff Glajch, VP of finance at Graham Manufacturing, thinks addressing these kinds of issues will bolster U.S. manufacturing, and even bring more manufacturing back to Batavia, so anything the Trump Administration can do to "level the playing field" would be good for America.

"If there’s a trade policy that favors U.S. manufacturing that is a positive to us," Glajch said.

What we don't know yet from the Trump Administration is what fair trade looks like and how we move from where we are now to where President Donald Trump thinks we should be.

GRAPHIC: Reproduction of the front page of The New York Times from 1930 carrying the warning of economists that the Smoot-Hawley Tariffs would start trade wars.

Previously:

• Part 1: Introduction
• Part 2: Globalization
• Part 3: China and robots
• Part 4: The Farm Economy
• Part 5: NAFTA
• Part 6: Border Adjustment Tax

An accident with a possible injury and entrapment is reported on Main Road east of  Lake Road, Pembroke.

Pembroke fire, Indian Falls fire, and Mercy EMS dispatched.

UPDATE 3:11 p.m.: A witness in the area said no entrapment.  Patients were sign offs.

A gas line has been struck at 9292 Warsaw Road, Le Roy.

Le Roy fire with one engine from Pavilion dispatched.

National Fuel is notified. No ETA.

Robert E. Merritt, 62, of East Main Street, Batavia, is charged with: two counts of criminal possession of a controlled substance, 7th; possession of a hypodermic instrument; and controlled substance not in original container. Merritt was arrested following a complaint at 6:23 a.m. of an incident on Hutchins Place. He was jailed on $1,000 bail or $2,000 bond. 

A 17-year-old resident of Holland Avenue, Batavia, is charged with petit larceny and burglary, 3rd. The youth is accused of entering Speedway after being previously barred from the store and stealing merchandise.

Kelli E. Wallace, 54, of Swan Street, Batavia, is charged with petit larceny. Wallace was arrested on a warrant stemming from an alleged theft at Kwik Fill on Ellicott and Jackson streets.

Nikayla C. Jackson, 19, no permanent address, was arrested on a warrant for alleged failure to appear in City Court. She was jailed on $5,000 bail or $10,000 bond.

Eric J. McGill, 33, of Porter Avenue, Batavia, is charged with harassment, 2nd. McGill is accused of threatening a neighbor. 

Gregory A. Burgess, 24, of Bowen Road, Attica, is charged with harassment, 2nd. Burgess is accused of grabbing another person during an argument.

Alex Isaac, 27, of East 83rd Street, Brooklyn, is charged with criminal contempt, 2nd. Isaac allegedly sent text messages to a protected party in violation of a court order.

Amar S.M. Zainelabdin, 29, of Affinity Lane, Buffalo, is charged with unlawful possession of marijuana, no headlights and suspended registration. Zainelabdin was stopped on Ellicott Street at 9:02 p.m. Friday by Officer Arick Perkins.

Sean M. Madigan, 31, of Collegeview Drive, Batavia, was arrested on a warrant for alleged failure to appear. Madigan was arrested following an anonymous tip on his location. He was jailed on $500 bail.

Tammy Marie O'Shea, 45, of Main Road, Stafford, is charged with criminal trespass, 3rd. O'Shea is accused of trespassing at an apartment complex on Main Road, Stafford, at 2 p.m. on Jan. 22.

Shana Lee Sullivan, 25, of Griswold Road, Stafford, is charged with unlawful possession of marijuana. Sullivan was charged following a traffic stop at 9:48 p.m. Tuesday on Griswold Road, Stafford, by Deputy Brian Thompson.

The GOP Plan: Border Adjustment Tax

This is part six of an eight-part series on trade and how changes in policy might affect the local economy.

Editorial cartoon from 1912 illustrating the dilemma of tariffs: protect profits for producers, harm consumers.

President Donald J. Trump, as he did as candidate Trump, talks trade deals and the need for creating a series of bilateral agreements. He also threatens tariffs against countries he thinks are taking advantage of the United States such as Mexico and China.

But congressional Republicans have their own plan, though it's not one it's at all clear Trump supports.

The proposal, called a Border Adjustment Tax (BAT), is part of a broader push by the GOP to reform the tax code and lower corporate taxes.

The BAT changes how companies pay taxes on their profits. Effectively, imports would be taxed and any profits from exports would be tax free.

The goal is to encourage more U.S. manufacturing and protect domestic companies from lower-priced imports.

Rep. Chris Collins supports the Border Adjustment Tax, which is part of a bill pending in the House now.  The bill is a massive overall of the tax code that would eliminate almost all itemized deductions for corporations and individuals, except the home mortgage interest deduction and charitable contributions.

The corporate tax rate would fall from 35 percent to 20 percent.

The BAT has many critics and raises many concerns for U.S. businesses, particularly retailers, who are dependent on imports. And though Trump made comments during his campaign that indicated he might look favorably on it, he's made comments since taking office that express concern about the proposal.

“Under the border adjustment concept, if somebody is making a motorcycle or a plane in our country, they’re getting a credit for the plane they make before they send it over to wherever it’s going,” he said. “And you don’t need that plus lower taxes and everything else.

"And it's too complicated. They get credit on some parts and not other parts. Where was the part made? I don’t want that. I just want it nice and simple.”

As you might expect, import-dependent businesses, such as large retailers, are fearful of the BAT. They argue they make nothing themselves to export to offset the expense of the tax on the goods they import to sell to their customers. JCPenney CEO Marvin Ellison said the BAT would make profitability nearly impossible for his company, at least in the near term.

"It takes our tax structure, as an example, from roughly a 34-percent corporate tax to over 170 percent," Ellison said.

Consumer prices, he said, would go up 20 percent.

"That's simple math."

Some economists think it's not that simple.

It's possible, some say, that the rise in the value of the dollar will balance the cost adjustment on imports and exports, or wages and prices rise together and consumers don't feel the pinch.

That's what Collins said he believes.

Pete Zeliff, owner of p.w. minor, when talking more generally about tariffs, said he believes things will work out in America's favor because of the strength of our economy.

"Tariffs may drive up prices, they may not drive up prices," Zeliff said. "What they will do is get more people to work where labor rates will go up and more people will be able to afford to buy everything. We will start manufacturing more and more here and prices will go down because our efficiency will be higher. Instead of 80 percent of our products made overseas, 80 percent will be made in America, so you will see prices go down."

Where a BAT makes sense -- if your goal is to tax all imports and exempt all exports, the BAT makes that easier to do. There's no car on the road today that was all made in Japan or in Mexico or the United States. Parts and supplies come from all over the world. A car assembled in Mexico contains many parts, up to 40 percent in some cases, that were manufactured in the United States. A BAT makes it easier to track which pieces get taxed and which don't instead of trying to figure out what portion of a finished product counts as imported and which should be considered American made.

A potential problem with the BAT is that would make things more expensive that simply can't be produced in the United States. You will pay more for chocolate and coffee, and since U.S. waters don't produce all the seafood Americans consume, we rely on imports, therefore seafood prices will rise.

Tequila comes from Mexico and while some avocados are grown in California, not enough to meet customer demand. Without margaritas and guacamole, a lot of Super Bowl parties could be ruined.

Collins said he understands Constellation Brands, based in Victor, is concerned about importing Corona from Mexico if the BAT goes through.

"They say you can't make a Mexican beer in the U.S., therefore it should be exempt," Collins said. "Should there be an exemption? If you put in one exemption, somebody else is saying, 'what about me? what about me?' and then it all falls apart. You don't have a 20-percent tax rate. You have a 34-percent tax rate. Don't count on any exemptions."

The big thing about the BAT is it's a big unknown. It's never been tried before. It's not clear that it will mean higher prices for consumers or if a stronger dollar will offset the adjustment. It's not clear it will raise as much revenue as Republicans hope year-after-year or if it will create more jobs in the United States or if it will even lower the trade deficit. What it is is a giant experiment with the U.S. economy and that excites some economists. They get to see in real time, in a real-world setting, how economic theory works.

Meanwhile, we don't know yet whether the BAT will even become law. The White House has not endorsed the plan and support is far from solid in the Senate. The administration does seem to think it can strong-arm trading partners into buying more U.S. goods, even if the prices are higher than what might be available from other suppliers.

All of this puts a lot of uncertainty around key parts of the U.S. economy, and business managers tend to prefer certainty when planning how they will run their businesses But the local business leaders we spoke to weren't particularly unsettled by the current transition.

 

"At this point, that uncertainty doesn't affect us," said Jeff Glajch, vice president and CFO for Graham Manufacturing in Batavia. "If one of those things were to suddenly result in a 35-percent tariff, that could cause some angst in the short term, but we tend to think that anything like a trade war would be short lived. Both sides would realize how harmful it is to both sides and they will come to the table."

Collins, himself a businessman, said he understands the need for certainty and that there may be some turmoil that goes with changes, but in the long run, local businesses will be better off.

"We're trying to move this fast, this tax reform piece," Collins said. "We want to get it done in 200 days, not three years. I acknowledge that there is some uncertainty and that is unsettling because people don't like uncertainty. In the meantime, you've got your customers and you make your product and you go home and worry a little bit. But it's all good news on the horizon, so maybe you go to bed and dream in multicolor."

Previously:

• Part 1: Introduction
• Part 2: Globalization
• Part 3: China and robots
• Part 4: The Farm Economy
• Part 5: NAFTA

A fire alarm sounded at Le Roy High School and shortly after Le Roy Fire was dispatched, there was a report of smoke in the nurses office at the school.

Also dispatched, Pavilion, a ladder truck from Bergen and City of Batavia's Fast Team. Stafford to fill in at Le Roy's Hall.

UPDATE 7:03 a.m.: Caledonia and Mumford also dispatched. Mumford will act as the Fast Team.

UPDATE 7:21 a.m.: Nurses office is being ventilated. 

UPDATE 7:22 a.m.: City fire back in service.

If necessary, District Attorney Lawrence Friedman will seek new grand jury indictments against a former Batavia resident who had his Genesee County convictions on sexual molestation charges thrown out by an appeals court.

In July 2014, after a jury trial, Sean A. Vickers, 47, was convicted of two counts of sodomy in the first degree, two counts of criminal sexual act in the first degree and sexual abuse in the first degree.

The appellate division of the Fourth Judicial Department threw out the first four convictions but left the 10th count of the amended indictment stand and ruled that the seven-year sentence imposed on that count was not unduly harsh.

The court ruled that because Vickers was originally indicted on counts of course of sexual conduct against a child and sexual predatory assault, those were the charges he should have been tried on, even though he consented to the amended indictment.

The court ruled a defendant cannot waive his right to be tried on the original indictment, citing prior case law.

The defendant has a "fundamental and nonwaivable right to be tried only on the crimes charged," the court said, citing the prior case, People v. Graves.  

"An indictment may not be amended in any respect which changes the theory or theories of the prosecution as reflected in the evidence before the grand jury which filed it," the court said.

Then County Court Judge Robert Noonan sentenced Victors more than 100 years in state prison, a sentence that was later reduced by statute to 50 years.

The sentence was to be served concurrently with the 20 years Vickers received in Niagara County, so even though these four convictions were thrown out, Vickers remains in state prison.

At his sentencing, Friedman said he couldn't recall a child molestation case that was more disturbing. 

"This case is the worst one I've ever had," Friedman said. "I've been in the criminal justice system for 40 years both as a prosecutor and a judge and I've never had anybody who has been prolific a predator as you have been Mr. Vickers."

Today, Friedman said he will seek permission to appeal this ruling, but if he can't, or the people don't prevail on appeal, he isn't done prosecuting Vickers.

"Ultimately, if needed, we will go before a grand jury with our four victims," Friedman said.

Press release:

The Genesee County Economic Development Center (GCEDC)  will take action on three projects at the Board’s meeting on Thursday, March 30.

Coach Tony's, a specialty sauce food processor, is seeking to build a new 5,000-square-foot building on three acres within Apple Tree Acres. The company has been operating out of a leased facility in the Town of Bergen. Coach Tony’s is requesting that the GCEDC Board accept an application for sales tax, mortgage tax and property tax abatements. 

The board also will consider approving a final resolution for tax exemptions in the City and Town of Batavia for O-AT-KA.  In 2016, O-AT-KA made a capital investment of approximately $20.9 million for a 200,000-square-foot warehouse expansion. The capital cost increased $850,000 and as a result the sales tax increased $68,000. 

Finally, the Board will consider a final resolution for approval of a GAIN Loan Fund for Jr. Maple, which owns and operates a maple syrup production farm in Batavia. The farm started with 800 taps, and has grown to 4,800 taps in just three years. The company is seeking a GAIN! Loan fund of $30,000 to purchase a more energy-efficient boiling system to enhance its operations.

The GCEDC Board meeting is open to the public and will take place in the Innovation Zone board room on 99 Medtech Drive starting at 4 p.m. on Thursday, March 30th.

This Saturday, music lovers who love brass can get an earful at Batavia Downs as five brass bands will perform in the Paddock Room.

The bands are Mighty St. Joe's Alumni Drum & Bugle Corps, Niagara Memorial Militaires Alumni Drum Corps, St. Joe's of Batavia Brass Ensemble, Parkside Brass, and Darkside of Parkside.

Food and beverages available during the performances.

Tickets are $15, which includes lunch and $10 in free play at Batavia Downs.

The show starts at 1 p.m.

Photo, Frank Panepento with his horn, on the right, Frank Cecere, T.J. Noce, assistant group sales manager for Batavia Downs, Mary Bucceri, group sales manager, and Harold McJury.

The Kiwanis Club of Batavia hosts its annual spaghetti and meatball dinner from noon to 3 p.m., Sunday, at the YWCA, 301 North St., Batavia.

Tickets are $6 per person.

Photo: Kiwanis members Matt Landers, Jocelyn Sikorski, Peter Guppenberger and Anne Bezon.

The Great Easter Egg Hunt, sponsored by the Kiwanis Club of Batavia, starts exactly at 9 a.m., April 15.

Yesterday, students at St. Joe's stuffed about 4,000 eggs with treats for the Easter Bunny to hide that morning. The Easter Bunny then paid a visit to the school.

With only one dissenting vote, the Batavia City Council last night agreed to take up the issue at its next meeting of providing $4,000 to GO ART! to help fund the July 4 Picnic in the Park.

The GO ART! Board almost didn't approve hosting the annual event in Centennial Park because of financial concerns. 

There was a time when the city provided GO ART! with $5,000 in annual funding. That assistance has been cut back to $2,500. This year, the county cut its funding to the arts council by 10 percent. Local donations continue to be hard to generate.

"We have a small number of businesses that support everything in our community and we tap them a lot," GO ART! Director Jennifer Gray told the council last night during a short presentation about the need for the assistance.

GO ART! was all set to drop the event when Michelle Crier came forward and offered to chair the event committee in an effort to keep it going at least one more year.

Gray said Picnic in the Park has never been a moneymaker, but it's at least broken even some years.

It costs $12,000 to host.

Council members had some questions about where the money was going to come from, with Al McGinnis raising a question about funds being transferred from the former Vibrant Batavia account. He said he thought that account was rolled back into the general fund. 

City Manager Jason Molino said that money remained earmarked, with approval of the council, for neighborhood projects and Picnic in the Park fit that criteria.

Gray, Crier and council members all mentioned how the community has lost some significant events in recent years, such as Summer in the City, the St. Joe's Lawn Fete, the Elba Onion Festival, and the Stafford Carnival.

Councilman John Canale noted that without Summer in the City and the Lawn Fete to support, the city was saving some money on those events.

"If we can look at some savings where events have been canceled, we can also apply some of those dollars towards the arts council," Canale said.

The council will vote on a resolution to approve the funding at its next business meeting, April 10. Councilwoman Rose Mary Christian voted no on the motion to consider the resolution at the business meeting.

Canale said he was a supporter of the arts -- he's a musician himself -- but in looking out for his constituents, he had to ask why the arts council was running into difficulty funding Picnic in the Park this year.

Gray said it's always been a struggle. The event was saved last year by a donation from the Red Osier restaurant in Stafford. 

Councilwoman Patti Pacino said another way of looking at it is that Gray is bringing more fiscal discipline to the arts council.

"A lot of the difference is we now have Jennifer Gray running this and she’s a businesswoman and she’s saying, ‘wait a minute, we can’t go in the drain every single year over Picnic in the Park,' " Pacino said.

Crier said she stepped up and volunteered to chair the picnic committee because she thinks it's an important community event, especially in light of other traditional events coming to an end.

"My husband and I moved here in 2000 from Buffalo," she said. "We raised our child in this community and I can’t image raising them anywhere else. Being in Batavia with the activities and the sense of community, you don't find that anywhere, especially on the west side of Buffalo. It’s a safe and beautiful community and it’s because of these events, because that’s where we see our neighbors, see our community."

Also at Monday's meeting:

• Council considered an application from a group planning a rally at 8:15 a.m., April 8, on East Main Street, on the north side of the street near Clinton Street. The rally will protest Congressman Chris Collins. Councilman Bob Bialkowski raised concerns about whether the group would be trespassing on private property -- the Aldi's parking lot -- and City Manager Jason Molino said that was between the property owner and the rally organizers. He also said that technically, the organizers didn't need to apply for a permit. So long as the sidewalk or traffic isn't blocked, it's a permissible activity.  
• Three people spoke against a proposed 80-unit apartment complex proposed for East Main Street that DePaul Community Services would like to build. The apartments would target veterans and their families as residents. A zoning change would be required and the property would become nonprofit owned. Councilman Al McGinnis shared the speakers' concerns about the project and objected to his conception that DePaul was looking to profit off of veterans, and that as a veteran he believed veterans wanted to live in houses and be part of the community. Apartments, he said, change the nature of the community. "This is a city of families," McGinnis told WBTA after the meeting. "Families are close-knit. Families live in houses. They become neighborhoods. I honestly think that too many apartments make for too many transients."
• The City Council agreed to vote on a resolution at its business meeting to declare four submachine guns in the Police Department as surplus so they can be traded for rifles that Police Chief Shawn Heubusch said better meet the department's strategic needs.
• The council also agreed to vote on a resolution at its next meeting to authorize spending $5,000 on a property appraisal on the former Wiard Plow Factory site on Swan Street. A city-appointed committee had recommended the site last fall as the best location for a new police headquarters, but property owner Tom Mancuso initially said he had other plans for the property. Just before the end of the year, he agreed to discuss a sale of the property to the city. The first step is getting an appraisal to determine fair market value, Molino said. If the owner was willing to sell at that price, the city would then need to complete an environmental review and title search before entering into a cost-analysis phase. With those details completed, the council then could consider whether to move foward with the project and complete the land purchase.

An accident with injuries is reported in the area of 430 E. Main St., Batavia.

A person is reportedly in and out of consciousness.

Fluids have spilled.

City fire and Mercy EMS responding.

UPDATE 10:20 a.m.: Four vehicles involved. An eastbound SUV drifted out of its lane of travel toward the south sidewalk, sideswiped a parked car, clipping its left rearview mirror, then plowed into the back of a parked SUV, pushing that vehicle into a parked sedan ahead of it. The driver may have suffered a medical issue. He was transported to UMMC.

NAFTA

This is part five of an eight-part series on trade and how changes in policy might affect the local economy.

While farmers worry about the impact of changes to the current world trade regime and the place of the United States in that scheme, even local ag leaders have their complaints about the North American Free Trade Agreement.

During his campaign for president, Donald J. Trump criticized NAFTA repeatedly and zeroed in on trade with Mexico as his chief complaint with the pact. Local farmers, though, are more concerned about NAFTA's impact on trade with Canada.  

For local manufacturers, NAFTA isn't a big worry, though they, too, see some need for reforms.

Trump said renegotiating NAFTA would be a top priority once he took office, calling trade with Mexico one-sided, pointing to the surging trade deficit and his belief that NAFTA has caused job loss in the United States.  

The truth is more complex.

Since the agreement was ratified in 1994 (negotiations began under President George H.W.  Bush, and President Bill Clinton signed it after it was ratified by the Senate), the United States has swung from a $1.7 billion U.S. surplus in 1993 to a $63 billion deficit; however, in that same time, U.S. exports to Mexico have grown from $41 billion to $231 billion. Some five million U.S. jobs depend on exports to Mexico.

By some estimates, more than 800,000 manufacturing jobs in the United States have been lost to Mexico since the passage of NAFTA, mostly in Rust Belt states. It appears jobs created by NAFTA have popped up in more Southern states, where there was a more ready supply of non-union labor.

The pattern of manufacturers fleeing higher cost Northern states for Southern states began decades before NAFTA was ratified. Think of GTE-Sylvania eliminating more than 700 jobs in Batavia in 1976 and shifting production to North Carolina.  

Compare Sylvania leaving, or Massey-Harris Harvester Company, or, more recently, PepsiCo with the Quaker Muller plant -- all companies with no roots in Genesee County -- to p.w. minor, Liberty Pumps, Chapin, and Graham -- all locally grown companies that are still in business, some after more than 100 years.

The leaders of those companies hold a variety of views on NAFTA.

For Bergen-based Liberty Pumps, Canada is one of the prime export markets for the company, said CEO Charlie Cook and he isn't anticipating any trade policy changes that will disrupt the business.

"Not a lot is going to happen with NAFTA as far as our relationship with Canada," Cook said. "It might change our relationship with Mexico, but that is not a big market for us. There is a lot of potential for us in Mexico, but it's not currently a big market."

Pete Zeliff, CEO of p.w. minor, doesn't anticipate much impact from potential changes to NAFTA and favors trade barriers that protect U.S. manufacturers.

"Even if we run into problems with renegotiating these trade deals and we can't export as much, if we can't import as much then we don't need to export as much," Zeliff said. "It creates a bigger market for USA-made products."

Neither Mexico nor Canada figures big in Graham's imports or exports. Graham designs and manufactures vacuum and heat transfer equipment for energy markets.

"We sell across the globe," Jeff Glajch said. "We sent a lot to the Middle East, a lot to Asia, South America. We don't tend to do a lot of business in Europe. We don't have a particular country that is more than 10 percent of our sales."

Jim Campbell, CEO of Chapin, said that any change with NAFTA will have some impact on his business, but it's unclear now what that impact will be. He said he belongs to a group that represents CEOs of U.S. manufacturing companies and NAFTA isn't universally loved by that group.

"The general consensus is that NAFTA didn't work as well as everyone thought it would," Campbell said. 

He said he tends to favor the kind of bilateral agreements Trump has said he intends to seek.

"If we have an agreement with just Canada, we can try to work out things so they are favorable to both sides," Campbell said. "The issues with Mexico are quite different than the issues we might have with Canada."

That said, he wants to see what the Trump Administration does before deciding if it's good or bad. Any change will affect Chapin and his main competitors equally, he said, so he anticipates a level playing field in that regard.

"Depending on how they do it, it could work out really great or it could be a disaster," Campbell said. "All I know is NAFTA is the devil we know and we all work around it."

CHART: Exports have increased on both sides of the border with Mexico since NAFTA was signed.

Previously:

• Part 1: Introduction
• Part 2: Globalization
• Part 3: China and robots
• Part 4: The Farm Economy

Christopher M. Oliveras, 25, of Lockport Road, Oakfield, is charged with DWI, driving with a BAC of .08 or greater, driving while ability impaired by drugs, unlawful possession of marijuana, failure to obey traffic control devices, and tinted windows. Oliveras was arrested in the City of Tonawanda by Tonawanda PD, at 1:30 a.m., Sunday. Earlier, he was stopped for allegedly driving the wrong way down a one-way street. At that time he was told to park the vehicle. Later in the evening, officers stopped the vehicle again and Oliveras was found to be the driver. Oliveras reportedly told officers, "I did park for a little while." He also reportedly said, "I was drinking Budweisers and smoking marijuana." A container of marijuana was allegedly found in the center console. He allegedly blew a BAC of .10. Bail was set at $250.

Rebecca Ann Edwards, 23, of Kibbe Avenue, Batavia, is charged with grand larceny, 3rd. Edwards is accused of stealing property with a value in excess of $3,000 from the 48 Deli Express in Batavia.

Students from Elba's kindergarten class took a field trip today to the Strong National Museum of Play in Rochester. The trip was paid for by the Salvaterra family in remembrance of their son, Brayden Salvaterra, as an expression of gratitude and thanks to the Elba School District, the Elba community and surrounding community, for the support and contributions made to the family in Brayden's honor.

Brayden passed away unexpectedly Jan. 23. Many donations were made to Brayden's memorial and this is the first event paid for by the memorial.

Photos and info submitted by Kristi Bennetti.

A generator has reportedly caused a shed fire at 7814 Sand Hill Road, on the Tonawanda Indian Reservation.

That's near on Higher Ground Smoke Shop.

Alabama fire along with one engine each from Pembroke and Indian Falls dispatched.

UPDATE 11:49 a.m.: Pembroke and Indian Falls can stand by in quarters.

Pavilion is hosting a community workshop to discuss its upcoming comprehensive plan this Wednesday from 6 to 8 p.m. at the Town Hall.

The Comprehensive Plan Steering Committee will lead a community discussion and present a look at the community's future during the workshop.

Light refreshments will be served.

Ground Force Fights hosted its second mixed martial arts tournament at Quality Inn & Suites on Saturday night.

Here are the results of the fights:

• Jeremy Stopa vs. Dave Scerbo -- submission grappling match -- draw at the end of 10-minute match
• Jim Perl defeated John Gearhart round one, submission due to strikes
• Nolan Brant defeated Mike Taylor, :57 round one, TKO/ref stoppage
• Eric Bonner defeated Shawn Henderson, round two, referee stoppage due to strikes
• Ben Horton defeated Jesse Neal, round two, TKO/ref stoppage
• DaJuan Robinson defeated Sequoyah Sethi, round one TKO
• Matt Norstrand defeated Pete Flanagan, ref stoppage -- guillotine choke
• Matvei Skvortsov defeated Corey Lauth, round one, ref stoppage -- guillotine choke
• Jillian Decoursey defeated Emme Weber by unanimous decision

Photos by Richie Casado.

Pete Flanagan, of Batavia, throws a punch during his match against Matt Norstrand.

Emme Weber vs. Jillian Decoursey.

Matt Norstrand, of Le Roy, won the title at 185 pounds.

The Farm Economy

This is part four of an eight-part series on trade and how changes in policy might affect the local economy.

It's hard to say just how much of what is produced in Genesee County is exported overseas. There are several companies that manufacture products here and ship what they build to China, Europe, the Middle East, Mexico and, of course, Canada, including Liberty Pumps, Chapin and Graham.

There is no database, though, that tracks exports at a rural, county level.

What we can say with some certainty, however -- our county's biggest export is what is grown here on our farms.

Everything the Trump Administration is talking about related to trade has the potential to have a big impact on local farmers. 

According to Dean Norton, an Elba dairy farmer and former president of the New York Farm Bureau, Trump's tack toward protectionism has already had an impact. When Trump canceled U.S. participation in the Trans-Pacific Partnership, New York farmers lost about $100 million in potential new revenue, Norton said.

"People don't understand that about 25 percent of what is produced locally is exported farm product," Norton said. "Exports and imports generally have a positive effect on the bottom line when it comes to trade."

Collins said he understands that agriculture is important to his district and he promises to represent those interests in Washington.

"There are a lot of ag issues and for many people when we talk about trade they think about cars and widgets and not about ag," Collins said. "I can promise you, I will be a voice at the table. I can't promise outcomes, but I can make sure the issues are on the table."

While Walmart and Target shoppers might find some electronics, clothing, and housewares more expensive during a trade war, supermarkets may not be able to stock some of our favorite foods. Besides the crops that can't be grown domestically, such as bananas and cocoa beans (at least in quantities sufficient to meet demand), many other crops are available out of season because they are grown in other countries, such as blueberries, lemons, watermelons and strawberries. 

"Consumers demand strawberries 12 months out of the year," noted Maureen Torrey, co-owner of Torrey Farms, but the only way we get strawberries in winter, she noted, is to import them from South America, primarily Chile.  

We import tomatoes and avocados from Mexico and Canada. California grows avocados but not enough to meet the current demand for guacamole.  

"The demand has gone through the roof," Torrey said.

Our tomatoes used to come from Florida, Torrey said, but after NAFTA (North American Free Trade Agreement), much of that production shifted to our southern and northern neighbors.  

Asked if the United States could again produce tomatoes, Torrey said, "That goes hand-in-hand with the fact we don't have the labor anymore to grow these hand crops. There's a lot of factors that interact with these whole trade agreements."

Mexico is second only to Canada as foreign suppliers of food to U.S. consumers, much of it products that can be easily grown in America.

When the president talks about NAFTA (a deal he promised to renegotiate as soon as he took office, but has yet to act on) he's usually drawing his ire on Mexico, Trump and administration officials have indicated Canada need not worry about drastic changes to the trade deal, but local farmers have long-standing complaints about trade with Canada.

While you might think NAFTA would make it easier for WNY farmers to ship grain, dairy, and meat to our northern neighbors, the opposite is true, they say, yet the U.S. market is completely open to Canadian farmers. The Canadian government, they charge, even subsidizes shipments of agriculture products to Florida.

Norton said dairy farmers have been battling Canadian restrictions since 1996.  

Various Canadian agriculture programs provide price supports, import quotas and production caps on domestic dairies. Since most of these programs are provincial, rather than controlled by the Canadian federal government, the restrictions are beyond the reach of the World Trade Organization. U.S. dairy farmers are unable to file a complaint with the WTO.

"The dairy industry there doesn't want to compete with imports even though their dairy industry is dying," Norton said.

Trade is important to farmers because from $120 billion to $140 billion worth of the nation's agricultural output is shipped overseas, which is why farmers get very nervous about the idea of new trade barriers. 

Last year, all of CY Farms soybeans were sold overseas, said its CEO Craig Yunker, noting that trade is fundamentally important to agriculture because of the whole concept of comparative advantage. What one country grows well, another may not, so they're both better off trading with each other than trying to produce something that neither can do as well as a trading partner.

"A banana republic down there can't grow corn and we don't grow bananas," Yunker said.

Yunker agrees with Norton -- that it hurt U.S. farmers to pull out of the Trans-Pacific Partnership.

Trade deals do more than open markets, he said, they set rules, allowing companies to compete on a level playing field. The rules deal with government subsidies, health and labor regulations and environmental concerns.

"All of these things were setting rules for a trading block and we helped set the rules," Yunker said. "We were able to do that because those other countries wanted access to our markets. Now China will put a trading block together and now China will set the rules."

China was not part of TPP, but keeping the Chinese market open to U.S. ag products is very important to farmers. As the Chinese economy grows, so does Chinese food consumption. Higher standards of living means people eat more meat, so the Chinese not only need more grain to feed themselves, they need it to feed their farm animals.

"They buy such a large amount of grain, just the thought of them shutting down would send a panic through world markets," Norton said. "Their billion and a half people are increasing lifestyle consumption so it's important that we're going to want to be at the table to provide some of those products for them. If we're not, some other countries are going to be and they will have no qualms about replacing the United States. Trade is a very dog-eat-dog world."

Russia and China have been improving trade relations over the past couple of years and recent Russia has become the world's largest wheat exporter.

That's significant, with or without new trade barriers, because grains are commodities and commodity pricing is impervious to protectionism. The only thing protectionism can do on commodity markets is make things more expensive.

For many products people buy and sell, a number of factors can determine the price. Quality, service, unique features, brand loyalty and other factors affect what people are willing to pay. But some products, known as commodities, don't have those differentiating features going for them. It all comes down to supply and demand. The greater the supply, the lower the demand, and then the lower the price. When supply drops and demand goes up, prices go up.  Commodity traders actually make their living placing financial bets on the trends in prices for commodities, which includes corn, wheat and soybeans.

Farmers don't set the price on commodity products they sell. The market does. That means trade barriers, or a rise in the value of the dollar, can make it much harder for domestic farmers to sell their crops overseas.  

As an example of the impact global markets can have on grain prices, Norton pointed to the recent history of corn. A couple of summers ago, the Midwest suffered a huge drought, hurting corn farms in those states. In WNY, we had plenty of rain and bumper corn crops. Local farmers took advantage of the weather patterns and planted more corn, but we still don't produce enough here to shift the world market. Corn prices hit record highs and local farmers reap bigger profits.

Last year, worldwide corn supplies rebounded and New York was hit with drought conditions, meaning less corn was grown here. As a whole, the New York ag industry suffered a $1 billion loss in 2016, according to the New York Farm Bureau.

"We are affected by what happens in Argentina, Brazil, China, all those things affect us one way or the other," Norton said.

CHART: Corn prices, 2007-2016

Previously:

• Part 1: Introduction
• Part 2: Globalization
• Part 3: China and robots