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Editorial -- Ag trade is one tough nut to crack Tuesday, June 23, 2009
Agriculture has hitched its star to dominating world trade.
The focus on foreign trade is understandable, given that U.S. agriculture depends on foreign markets to keep demand high enough to keep grain prices profitable.
The fruits of foreign trade have been both bitter and sweet. The Chinese had developed an appetite for soybean meal and pork products. However, the Chinese -- like the Russians -- have proven fickle. Both nations have stopped U.S. pork from entering their markets using the recent H1N1 disease outbreak as a convenient, though unscientific, excuse. It would be nice if both nations dropped their bans, but that is how trading in agricultural products goes.
The Obama administration's recent actions suggest that the Cuban marketplace will soon swing open to U.S. trade. Although small potatoes when compared to other trading partners, the Cuban market holds great growth potential. Cubans, forced to live under communist dictatorship since the late 1950s, yearn for a higher standard of living. Cheap and plentiful U.S. meat and grain would mean more disposable income so they could buy modern cars and appliances.
The former Iron Curtain countries also hold promise, but they lack money and prospects for prosperity look bleak while they struggle to modernize their economies along with their agriculture.
Remember what was promised in the General Agreement on Tariffs and Trade and the North American Free Trade Agreement? Economies would blossom for all parties involved as trade grew. Even GATT's and NAFTA's biggest backers knew the deals would create winners and losers. However, few Americans realized then how many factories would close and jobs would leave our borders as companies pursued bigger profits overseas. The factories that provided good-paying employment are gone and won't come back, leaving the Rust Belt struggling for new opportunities, which are apparently easiest found in the service industry.
Land -- our richest natural resources -- can't be exported. The production wizardry of our farmers and Mother Nature's gift to us makes U.S. ag production the eighth wonder of the world. We can out-compete everyone -- including South American soybean producers -- in the marketplace.
Still, trade protectionism has its place.
"Buy American'' campaigns have become popular again. Once, most Americans turned their noses up at Japanese cars, cheap Chinese toys and other inferior foreign products. We have watched our car makers become dinosaurs. We have accepted the flood of Chinese imports, even though we know some have proven to be dangerous to our health.
The resulting backlash has left consumers wanting something else. When it comes to food, local connections are growing in importance. The desire to know the farmer who produces our meat and vegetables and to have some say in how it is produced is growing. Country of Origin labeling -- billed as naked protectionism by some trading partners -- has proven popular with consumers.
Ag trade negotiators who thirst to create more free-trade deals had better keep in mind that Americans are no longer willing to be forced to sacrifice their own economic interests so that a deal or two can be struck.
Fair trade, not free trade, must be pursued.
Now is the time to protect our own interests, even if protectionism carries its own set of risks for agriculture. |
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