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December 2009 Archive for The Truth about Trade

RSS By: Dean Kleckner, AgWeb.com

Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.

Let It Be….

Dec 23, 2009
The Beatles recorded much of the soundtrack of my life, but that doesn’t mean I want Paul McCartney to write the cookbook for my kitchen.
Earlier this month, the former Beatles frontman spoke at a European Parliament forum and urged his listeners to alter their eating habits. “We call on people worldwide, but especially in the developed nations, to change their diet to one meat-free day as the most effective way to combat global warming,” he said in a statement.
Last summer, McCartney launched a cause called “Meat Free Monday.” He started a website and even recorded a song. It won’t go down as a lost classic that belongs on Sgt. Pepper’s Lonely Hearts Club Band, but you can hear him sing it on YouTube.
Do you want to know a secret? I have no problem with people choosing not to eat meat. Some may not like the taste. Others face health restrictions. Catholics have a long tradition of avoiding meat on Fridays, especially during Lent.
Yet I worry about McCartney’s message and the effect that its widespread adoption would have on people around the world, especially in developing countries. His view of farming is utterly unrealistic, sort of like a fantasy world where "rocking horse people eat marshmallow pies".
His real message is far more radical than his little ditty about Mondays would suggest. He believes that the human consumption of meat is bad for the world, and that everybody would be much better off if we switched to an all-plant diet. In other words, he really wants people to reject meat not just on Mondays, but eight days a week.
It’s like McCartney wants to rename one of his early records from “Meet the Beatles” to “Beat the Meatles.”
McCartney believes that mass vegetarianism would be a boon for the environment. He has recently adapted his message to climate change: One of his favorite slogans is “Less Meat, Less Heat.” His rationale is that because meat production results in the emission of greenhouse gases, then less meat production will put the brakes on global warming.
So will fewer rock concerts in front of tens of thousands of people, by the way; but I'm not advocating that!
I just think that Mr. McCartney needs to stop and think about the unintended consequences of his agenda. Let me help him get his feet back on the ground.
You see, I don't think of myself as a "nowhere man". I’m a lifelong farmer who grows crops and raises livestock. I find it hard to imagine a sustainable form of agriculture that doesn’t mix these two practices just as nature has always done. My cattle receive the majority of their food from crop residue or grain processing by-products--in other words, leftovers such as corn stalks and other materials we mere humans can't utilize directly. And we don't just recycle on the input side. The waste my animals subsequently produce is not wasted. It goes onto fields as my primary source of fertilizer. This cycle has built up the fertility of my fields for generations and has created a resource legacy for me to pass along to my children.
It’s an efficient way to produce food. It’s also a diversified, sophisticated system that’s getting better all the time. If you remove one piece from the circle, you throw everything else out of whack. These methods, used by me and an untold number of other food producers, are diversified and they’ve evolved over time. They’re the destination we’ve reached at the end of a long and winding road.
When McCartney attacks these systems because they offend his vegetarian sensibilities, I’m reminded of the refrain to his song, “I’m Looking through You.” He certainly doesn’t see farmers or understand their value.
Instead of defaming meat, we should teach the best practices of modern agriculture to farmers in developing countries--farmers who desperately need to boost their productivity in order to feed booming populations and improve their own livelihoods. These best practices include a proper balance between crops and livestock. There’s a nutritional element as well: Meat is an excellent way to deliver protein and balanced nutrition. People in poor countries will benefit from more of it, not less.
Anti-scientific fears about biotechnology among elitists in Europe already have had a devastating effect on resource poor people, especially in Africa. A similar campaign against meat would do them further harm.
Paul McCartney means well. If he were to take the time to learn more about sustainable agriculture, he’d see that meat poses no threat to the planet. And then maybe he’d just let it be. Imagine……..
Reg Clause, a Paul McCartney and Beatles long-time fan, raises cattle, corn and soybeans on a fourth generation family farm in central Iowa. He is a Truth About Trade and Technology board member (www.truthabouttrrade.org)

Tire Tariff Truth & Consequences

Dec 17, 2009
If you’ve tried to buy new tires recently, you may have experienced sticker shock. Did they cost more than you had expected?
The price of tires is going up. For this major inconvenience, we can thank the politics of protectionism--and in particular, a decision three months ago by the Obama administration to slap a punitive tariff on low-cost tires manufactured in China.
Now tire makers are pumping up their prices. Goodyear has announced price increases of up to 6 percent, according to Modern Tire Dealer, an industry publication.
Goodyear is by no means alone. Other price-inflaters include Bridgestone (5 percent), Continental (5 percent), Hancock (5 percent), Kumho (8 percent), Nexen (8 percent), Pirelli (4.5 percent), Toyo (6 percent), and Yokohama (6 percent). KeyBanc analyst Saul Ludwig told the Associated Press that he expects tire prices to rise by as much as 10 percent by January, when Americans begin a year in which they’re expected to buy more than 200 million replacement tires.
Would it be tiresome for me to say “I told you so”? Last summer, when the White House was merely thinking about slapping a tariff on tire imports, I warned that this action would raise the cost of driving for Americans. Back then, it was an educated guess. Today, however, the rubber has hit the road, so to speak--and we have the cold, hard proof that protectionism hits Americans in the pocketbook.
Common sense apparently has come to a screeching halt in Washington, D.C. The unemployment rate is already above 10 percent. Economic forecasters suspect it will stay at this elevated level for a while. So at a time when Americans are struggling financially, the federal government has enacted a policy that makes it more expensive to drive to work--or to drive around looking for work.
For motorists, of course, tires aren’t exactly a luxury. They’re a necessity. Some in the tire industry expect a run on supplies in the near future, on account of many struggling Americans having delayed tire purchases during the economic doldrums of 2009. Now, as people realize that they can’t put off the inevitable forever, they’re going to face even higher prices. These won’t be the result of ordinary market fluctuations, but rather the political choices of our elected officials.
The Obama administration has justified its 35-percent tariff by claiming that low-cost Chinese tires have led to the loss of 5,000 American jobs over the last five years. Even if this number is accurate--and I have my doubts, because its ultimate source is Big Labor--the tariff isn’t going to restore a single one of them. Overseas manufacturers are already scrambling to shift their production out of China and into other Asian countries with low-cost labor. Let’s face it: These jobs aren’t coming back to America, with or without a costly tariff.
But consumers will pay more for tires anyway. Tire makers are dealing with the tariff by increasing their prices across the board--so everyone will shoulder at least some of the burden, including consumers who intend to buy tires made in the United States.
Those who are least able to pay will suffer the most, however. Chinese imports have concentrated on one end of the tire market--i.e., the low-cost tires that Americans with limited budgets are most likely to purchase. With the new tariff, a set of tires that previously had cost $295 will sell for more than $400.
This tariff isn’t just about tires, either. It erodes America’s position as a global leader in the international exchange of goods and services. The next time China or any other country imposes a new tariff on an important U.S. product--one whose success is tied to the productive employment of working Americans--how are we to object? We certainly can’t occupy the moral high ground.
When it comes to the tire tariffs imposed by Washington, Americans may want to take inspiration from their forefathers and revive a potent phrase that now assumes a new relevance: Don’t tread on me.
Tim Burrack raises corn and soybeans in partnership with his brother on their NE Iowa family farm. Tim is a Board Member of Truth About Trade and Technology www.truthabouttrade.org

A Seat at the Table

Dec 10, 2009
“Something is rotten in the state of Denmark,” says one of the minor characters in Shakespeare’s Hamlet.
Let’s hope that farmers don’t wind up drawing the same conclusion about the UN Climate Change Conference in Copenhagen.
We’re about halfway through this massive two-week event, which has attracted more than 16,000 delegates. That’s enough to fill a basketball arena. Many of these conference-goers hope that the nations of the world will agree to reduce their greenhouse-gas emissions in order to reverse global warming.
Their own transportation and accommodations will release more than 40,000 tons of carbon dioxide into the atmosphere, according to one estimate. Arguably, this big carbon footprint will worsen the very problem that they’re trying to solve.
It goes to show that even the finest motives can suffer from unintended consequences--and why attendees, whose ranks will include President Obama next week, will have to tread carefully when it comes to farmers.
The conference has officially designated December 12, as Agriculture and Rural Development Day. I hope this means that farmers will be included in the panels--rather than seen as targets with bulls-eyes drawn on their backs.
Agricultural activity accounts for about 14 percent of all greenhouse gases around the world. In some developing countries, especially in Sub-Saharan Africa, farming is responsible for the majority of all carbon-dioxide emissions.
So agriculture will have to be an important part of any discussion on how to reduce greenhouse gases. The answer isn’t as blissfully simple as asking us to start driving "green" tractors--and I don’t mean machines built and painted green by John Deere.
Whether you believe that climate change is a human phenomenon or a natural event in the long history of our planet is not the issue. It's hard for laymen to know what to make of it all. Even the experts don’t agree. It becomes more confusing in light of the new “Climategate” controversy. Several influential researchers, mainly from the US and UK, are alleged to have twisted data in order to score political points--a behavior that is the exact opposite of what we should expect from scientists.
No matter where people come down on this issue, all should be able to agree on one point: Humans are capable of messing things up, whether it’s the climate or the debate about the climate.
Let’s not allow blind obsessions on either side of the global warming issue mess up agriculture, too. If this conference raises the cost of farming, thereby making food production more costly and less bountiful, then what will we have accomplished?
Perhaps the planet will be warmer. Perhaps it will be cooler. One thing is certain: It will be a lot hungrier. That’s because a separate branch of the UN, the Food and Agriculture Organization, says that food production will have to double between now and 2050.
To meet the FAO’s goal, farmers must become more productive. This will be enough of a challenge without also having to contend with new restrictions on energy use.
Here’s a modest proposal for the UN and the people attending its conference in Denmark: Any final agreement on climate-change policies must do nothing to imperil global food security. In other words, they should avoid policies that will make it more difficult for farmers to feed the world.
A recent report points out the hazards of a one-size-fits-all approach to climate policy. In some nations, it may make sense to encourage an intensification of agriculture because it would lead to welcome gains in productivity and lesson the pressure to turn forests into farmland.
More international trade would help, too. By improving the flow of goods and services across borders, it may become possible for regions with relatively low carbon emissions to produce food for regions with higher levels.
But the bottom line is that when it comes to the deliberations over global warming, farmers must have a seat at the table. If they don’t have one, the Copenhagen conference may try to celebrate whatever success it enjoys this week--only to discover that nobody has anything to eat.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. www.truthabouttrade.org

Searching For A Newsworthy Deal

Dec 03, 2009
Police in Switzerland had to break up a violent rally last weekend when anti-globalization protestors burned cars and smashed windows to express their objections to the World Trade Organization’s ministerial meeting.
These acts of hooliganism are appalling--but they’re also nothing like what I witnessed a decade ago, when agitators disrupted the WTO’s 1999 meetings in what some people now call “the Battle in Seattle.”
It seemed as though the WTO wanted to stay out of the news this week--and it mostly succeeded.
I would have welcomed a positive headline, such as one announcing a breakthrough in the long-running Doha negotiations, which hold the potential to increase global prosperity. Yet we knew ahead of time that a surprise success wasn’t going to happen. “It is simply not ripe for this kind of thing,” warned WTO Director-General Pascal Lamy. The meetings were billed as a “housekeeping” session that would focus on other issues, such as dispute settlement.
Perhaps no news is good news. The news in Geneva very easily could have been bad, if only because that’s what the media loves to report. For the WTO’s first ministerial conference in four years, part of me is just glad negotiators were able to get together for dinner without any reality-television wannabes crashing the party.
Party crashing may be a fluke at the White House, but there’s a sad history of it at the WTO.
In Seattle, I was present at the destruction. The protestors numbered about 45,000. Many of them looked young, like high-school or college students. They weren’t trying to make a serious point about politics or economics. They were cutting class and searching for fun, under the disturbing spell of mob psychology. According to one estimate, their violent antics cost local businesses $20 million in damage.
Even more puzzling, in its way, was the behavior of longshoremen. Their unions paid them to show up and protest the WTO talks. Without global trade, of course, many in their ranks wouldn’t even have jobs. I tried to discuss this with a few of them, but they failed to make the vital connection between trade policies and their employment.
After Seattle, the WTO held its next ministerial meeting in Doha--and launched what is now known as its Doha round of talks. These began in 2001 and were supposed to finish by 2005. Yet they continue to drag on, with no apparent end in sight. Their successful completion would deliver a good jolt to the world economy, which sure could use it.
Protesters continue to show up at WTO meetings, but they are a nuisance rather than a danger. Inertia on the part of countries that should be leading the organization is a more significant threat.
This has been a tough year for trade. For the 12 months that ended in September, the international exchange of goods and services dropped by more than 14 percent from a year earlier, reports the New York Times. Trade has started to tick upward again, but it remains well below where it stood before the financial crisis.
Many countries have returned to protectionism. Argentina and Russia are probably the worst abusers, though plenty of other nations have contributed to this harmful trend. The United States introduced “buy American” requirements in the stimulus bill. More recently, the Obama administration imposed special duties on low-cost tires made in China. Neither should have been done.
The completion of the Doha round would help to reverse course and also improve business confidence around the world. But if this isn’t possible, it may be time to consider next-best alternatives. The International Food & Agricultural Trade Policy Council has called for finishing the Doha round, but it also has released an extensive report on the pros and cons of other options, such as bilateral accords, regional deals, and industry-specific agreements. These options are worth careful study.
Ten years ago, Seattle’s protestors stole the headlines. Today, the WTO is out of the headlines almost entirely. When trade flows smoothly, that can be a good thing. Right now, it would be nice to see the WTO in the news for making progress.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. Mr. Kleckner was the only farmer to serve on the U.S. Advisory Team during the GATT Uruguay Round of World trade talks. www.truthabouttrade.org
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