Ga farmer urges his horse to pull a wagon. the horse refuses, saying to try would be futile for it would flout newton's third law. the house concluded that she can't exert a greater force on the wagon than the wagon exerts on her, and therfore won't be able to accelerate the wagon. what is your explanation to convince the horse to pull?

forces do not cancel out because they act on different bodies 
also the forces acting on the horse is not just the force he exerts on the wagon 
he also applies force on the ground so the static friction on the ground helps the horse move forward 

forces acting on the horse are friction in its direction of motion and the tension opposing motion 
if the surface has enough friction he can always move