The Truth about Trade
Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.
Editor's Note: We are saddened to hear of Dean Kleckner’s passing and extend our sympathies to his family and friends. The AgWeb staff is grateful to have had the chance to work with him.
We Need a Grand-Slam Trade Agenda
Jul 30, 2010
By Tim Burrack – Arlington, Iowa (www.truthabouttrade.org)
In the world of baseball, everybody’s talking about the trade deadline—teams are trying to get deals done in time for their pennant races.
In the world of Washington, they’re talking about a different kind of trade—the exchange of goods and services across borders. Unfortunately, almost nobody in D.C. shares the deadline-driven urgency of baseball’s general managers, who are busy swapping players and revamping rosters.
Instead, we’re waiting on our political leaders for proof of actual progress. But there hasn’t been much lately.
President Obama recently boasted that exports during the first four months of this year were almost 17 percent higher than they were during the first four months of last year. That’s all well and good, but it has more to do with the ebb and flow of economic cycles than anything public officials have done for America’s export-dependent farmers and manufacturers.
The White House often confuses rhetoric with results. Saying something is not the same as doing something. Earlier this month, for example, Obama introduced the members of his new President's Export Council. The move generated some headlines, but nothing else.
Does the president really need a panel of advisors to tell him that the highest priorities on the U.S. trade agenda are approving the free-trade agreements already negotiated with Colombia, Panama, and South Korea? This has been true for more than three years. Yet Congress has let these deals languish. And the Obama administration has done almost nothing to revive them.
Granted, the president has come a long way. As a senator, he was a devoted protectionist. As a presidential candidate, he talked about renegotiating and / or quitting NAFTA.
Today, Obama appears to have had some second thoughts about economic isolationism. Confronted by an unemployment crisis, Obama has started to appreciate the fact that exports mean jobs for American workers. In his State of the Union address earlier this year, he promised that U.S. exports would double over the next five years. He also called for passing the three long-ignored trade pacts.
Now he has to turn these words into action.
According to some, action will have to wait until after the midterm elections in November, during a congressional lame-duck session. Well, that’s what they’re saying about an awful lot of proposals. Let’s get one thing straight: We needed these trade deals approved yesterday. A lame-duck session is for a lame trade agenda.
Every day that goes by, we lose the opportunity to create jobs.
Three years ago, the United States enjoyed 96 percent of the grain trade with Colombia. That’s true market dominance. Last year, however, this figure slipped to just 31 percent. While Congress ignored Colombia and refused to approve the U.S.-Colombia Free Trade Agreement, South American countries secured their own trade preferences and snatched the country’s consumers.
Our grains face a 15 percent Colombian tariff, costing us $1 Billion a year in lost sales ($314 million of that was just corn sales). We will continue to lose sales as long as Washington does nothing and refuses to approve this trade deal. There are currently 126 FTA's under negotiation around the world involving U.S. trading partners – but we're not involved in any of them!
Canada has approved its own trade agreement with Colombia, dropping the tariff on Canadian wheat to zero. Over time, our dwindling market share will shrink to virtually nothing. We will have forfeited an excellent position.
When we squander our economic future, American workers suffer. The American Meat Institute recently calculated that approving the trade pacts with Colombia, Panama, and South Korea would create almost 30,000 jobs. And that’s in just one sector of agriculture, to say nothing of agriculture’s other sectors or all of the other U.S. industries that would benefit from improved access to these foreign markets.
If the United States wants a jobs program, it needs to look no further than these trade agreements. Passing them today would improve employment tomorrow. This is how economies move from recession to growth.
Ultimately, the United States will want to seek more deals with other countries. The distinguished economic Jagdish Bhagwati recently called on Obama to live up to his reputation as a multilateralist and launch the “Obama Round” of world trade talks.
That’s a grand agenda—or, in baseball terms, a grand-slam agenda. In the meantime, can we just achieve a simple base hit? On trade, America has been striking out for long enough.
Tim Burrack raises corn, soybeans and hogs on a NE Iowa family farm. Tim is a Board Member of Truth About Trade and Technology www.truthabouttrade.org