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The Ag Agenda

October 2009

Has U.S. Trade Gone by the Wayside?


Bob Stallman
President
American Farm Bureau
By Bob Stallman
President, American Farm Bureau

Trade has always been important to the United States, especially the agriculture industry. Not only does it boost jobs for millions of Americans, but it expands our opportunities to reach wider markets, making us global players.

According to Shakespeare, all the world’s a stage...Unfortunately, lack of an international trade agenda over the last eight months has left many U.S. industries watching from the wings while their competitors perform front and center.

Closing an Open Door

Talking of foreign relations in 1913, President Woodrow Wilson opined that “Our interests are those of an open door – a door of friendship and mutual advantage. This is the only door we care to enter.” Fast-forward nearly 100 years and we are still seeking that open door policy by way of trade agreements with Colombia, Panama and Korea, all of which have been left on the table. Meanwhile, U.S. agriculture is losing millions of dollars in exports to competitors all too enthusiastic to take our market share.

The United States exported a record-setting $115.5 billion in agricultural products in 2008.In part because of unsigned trade agreements and lack of a world trade deal, the Agriculture Department predicts that number will fall to $97 billion in 2009.

In addition to inaction on already-negotiated trade agreements, there is more evidence that the U.S. commitment to trade is wavering. For more than a year now, we have not been in compliance with our obligation under the North American Free Trade Agreement (NAFTA) allowing Mexican trucks to drive on U.S. highways. In retaliation, Mexico has imposed tariffs of up to 45 percent on 90 American agricultural and industrial imports. And yet, there is still no action to remedy the situation.

While the administration needs to address trade agreements and World Trade Organization negotiations, both of which are on the table now, we should also look for other market opportunities for agriculture.

Proactive vs. Inactive

Ninety-five percent of the world’s population lives outside U.S. borders. That means for every 20 consumers of food and agricultural products, only one of them is an American citizen. Instead of being proactive and taking advantage of potential global markets, it seems we are instead shutting off our borders and becoming protectionists.

Trade helps improve the overall U.S. economy. According to USDA, in 2006, agricultural exports created $117 billion in economic activity, including jobs in manufacturing, food processing and packaging, transportation, advertising and other services. Beyond the farm gate, agricultural exports are a driving factor in the entire U.S. economy.

On the farm, trade is even more important. Most farmers and ranchers rely on export markets. In 2008, more than 33 percent of total market cash receipts for agriculture came from global sales.

Through agreements such as NAFTA, agriculture exports have almost tripled since 1996. So, it makes no sense to stop now. During these economic times, the U.S. can’t afford to get caught in the protectionist propaganda of those who oppose U.S. trade. This only allows other countries to move forward with trade agreements, increasing their competitiveness, striking deals with our partners on the world stage while we are dancing by ourselves in the wings.