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August 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.

Time Bomb

Aug 27, 2009
“Farmers aren’t the enemy,” insists Time magazine in its current cover story. It’s just that everything we do is bad for people, animals, and the environment.
I’ve experienced acts of drive-by journalism before: Some reporter travels to farm country, spends a day or two staring at barns and cornstalks, and then returns to his air-conditioned office in the city. From this comfortable perch, he tries to lecture us hayseeds on agriculture.
Bryan Walsh of Time has taken this brand of arrogance to a new level. He actually thinks farmers are dooming America to “a future of eroded farmland, hollowed-out countryside, scarier germs, higher health costs--and bland taste.”
He forgot to mention that we’re also responsible for bad television, leaky faucets, and people who send text messages while they drive.
The United States would be a better place, Walsh claims, if farmers would change the basics of their business. He wants us to replace our corn fields and tractors with little plots of organic arugula and packs of weed-picking farmhands. Then, instead of loading our products onto trucks and trains for destinations near and far, we’ll put on our plaid shirts and sell our wares from horse-drawn carts at the local farmer’s market.
It’s a nice fantasy, especially for people who don’t value the incredible productivity and efficiency of modern agriculture, which makes it possible for Minnesotans to drink orange juice at reasonable prices in January.
Walsh has the decency to admit that the adoption of his radical theories would force grocery-store bills to skyrocket: “organic food continues to cost on average several times more than its conventional counterparts,” he writes. That statement is one of the few indisputable facts to be found in his entire article.
Sadly, attacking farmers has become fashionable among media elites. Last Sunday, New York Times columnist Nicholas D. Kristof lamented that modern farming “has no soul,” whatever that means. (Anybody who thinks this way should meet a few real farmers, whose passion and dedication are as strong as ever.)
Fads are nothing new in journalism, of course. Just last year, Time was busy bemoaning the cost of what we eat: “Soaring food prices have erupted into a global crisis with potentially dire consequences for millions of people,” warned the magazine in its June 16, 2008 issue. Writer Vivienne Walt called for more chemical fertilizers and genetically modified crops--innovations that “could dramatically improve the world’s ability to feed itself.”
But that was so 2008, back in history days. Are journalists and their editors seriously supposed to keep track of their concerns from long ago?
Maybe Time’s staff writers should take a break from contradicting themselves and hold a debate: Walt vs. Walsh on the challenges and costs of food production. Meanwhile, I’ll stick to raising my crops, so that these scribblers can argue with full bellies.
As it happens, Walt was correct last year when she said that farmers must embrace modern technology in order to feed a booming world population. There is no other way to confront this important, ongoing problem.
Walsh’s conflicting advice in the current issue is sheer nonsense. He offers it in the name of “sustainability,” a buzzword whose true meaning he doesn’t even begin to understand. There’s nothing sustainable about turning our backs on safe and proven methods of food production, especially when human lives are on the line.
I have no quarrel with organic food. If Walsh wants to eat it, he should choose to buy it. Farmers, too, should be free to meet this market demand. But let’s not fool ourselves into thinking that organic food can feed a planet with billions of people. Instead, it would lead to less wilderness and more hunger.
I'm not eager to tell the writers and editors of Time how to do their jobs. I may be an occasional consumer of what they produce, but I’m no expert at publishing magazines. I certainly wouldn’t suggest that they replace their computers with typewriters or their printing presses with woodblocks. I do believe they should spend more time talking to the real experts on agriculture: farmers, ranchers, land-grant researchers, and so on.
Yet, they seem most interested in bossing us around: They want us to quit our modern practices in favor of primitivism.
We should make a deal. If journalists at Time and elsewhere will stop telling me how to work the land, soulfully or otherwise, I won’t tell them how to write articles. It will give me something good to read now and then--and it will keep them well fed, even if they decide to take the food on their forks for granted.
John R eifsteck, a corn and soybean farmer in western Champaign County Illinois, is a Board Member of Truth About Trade and Technology (www.truthabouttrade.org).

Flat Tire Tariff

Aug 24, 2009
Tariffs tire me out. I mean that quite literally.
In June, the U.S. International Trade Commission ruled that lower cost Chinese tires are replacing U.S. tires.  They encouraged President Obama to embrace economic isolationism – recommending that the administration slap huge tariffs on tire imports from China. 
Who stands to suffer? American farmers and American consumers.
On the face of it, this makes no sense. Farmers grow food. We have nothing to do with tire manufacturing.
But trade wars never make any sense--and this administration will spark one if they adopt the ITC’s recommendation. China has threatened to retaliate against tire tariffs by raising its own duties on U.S. exports of soybeans and pork.
The bad result of this tit-for-tat trade war is entirely predictable: Americans will buy fewer Chinese tires and the Chinese will purchase less American food. Instead of trying to reduce conflict in trade, we will have worsened it.
Enough already!
Nobody wins a trade war, except possibly for special-interest groups that can lobby the government for favors. Tire tariffs wouldn’t even be up for discussion without the pleadings of Big Labor. Union bosses want to rig the rules for their own benefit, without regard for how their selfish actions will imperil the economic welfare of other Americans.
Farmers in the United States rely on exports for our livelihood. We need China’s market. The country with the world’s largest population is a major destination for our soybeans and pork. Its soybean imports will exceed 38 million tons in 2009-10, says the U.S. Department of Agriculture. Moreover, the United States shipped 12 million tons of pork--worth almost $20 million--to China in April. For the first time, our exports top those of the European Union. 
A tire tariff will shred these gains. The fruits of hard work and innovation will slip away. America’s reputation for leading by example will look like a blown-out tire lying on the side of the highway.
Farmers won’t be the only losers in the United States. Consumers will suffer as well. The ITC recommendation calls for a 55-percent tariff on Chinese tires. This rate supposedly would decline to 45 percent in the second year and 35 percent in the third year. Then it would vanish. At least that’s the theory. I’m willing to bet that the same people who are demanding the tariff today will call for its retention later on.
However it plays out, consumers will enjoy fewer choices from tire retailers. The Chinese happen to specialize in low-end replacement tires, meaning that Americans of limited means will see their cost of driving increase. During a time of economic crisis, this is hardly an outcome our government should seek to produce.
Jobs make be at stake as well. Americans who are involved in tire distribution and sales could bear pay cuts or layoffs.
The Obama administration has a few weeks to make up its mind. The office of the U.S. trade representative will suggest a course of action by September 2. Once the White House receives this suggestion, the president will have 15 days to decide what to do.
Perhaps we have to let this process play out, but the facts are already in. We know for certain that new tire tariffs will hurt farmers, consumers, and retail employees. Their suffering won’t be the result of “unintended consequences”--it will be because the Obama administration has made a conscious decision to disfavor them, almost certainly for political reasons.
This is a gut check for President Obama. As a candidate for the White House, he flirted with protectionism. As President, first came "Buy American" in the stimulus bill and the world was unhappy.  Second, he broke a trade agreement on Mexican trucks and they put $1.6 billion of tariffs on U.S. exports into Mexico.  Third, we have a slow-down of FTA approval and now, Chinese tires.
President Obama is at a crossroads in his trade policy.  His decision on tires will be the bellwether point on future trade policy for this nation.  Will he drive the road of more flat-tire protectionism – less trade, higher consumer prices?  Or, will he take the path of keeping the trade lanes open, helping the economic recovery to get going? 
During the campaign President Obama said, "It would be a good thing to make sure our tires are properly inflated."  Now I ask him to make sure HE has the correct tire inflation. There is more than just a rough ride at stake.
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

An Open letter from an American Farmer to US Trade Representative Ron Kirk

Aug 13, 2009
Dear U.S. Trade Representative Ron Kirk,
The other day, after finishing War and Peace, I started to flip through the Federal Register, the daily publication of Washington’s massive bureaucracy.
Actually, that’s not true. I haven’t tried to read War and Peace. And nobody—absolutely nobody—can keep up with the Federal Register. Every day, it spews forth hundreds of pages of proposed rules and regulations on everything from widget manufacturing to trinket production. It makes War and Peace, one of the longest novels ever written, look like a board book for toddlers.
But I did learn about what appears on pages 37,759 and 37,760 in this year’s edition. You have posted a “request for comments” on free trade with Colombia.
I’d like to accept your offer. But rather than entomb my thoughts beneath the mountainous pile of paperwork that is the Federal Register, I thought I’d just send you a letter—an “open letter” for all to see.
Let me be perfectly clear about one thing: American ranchers need the Obama administration and Congress to approve this trade agreement with Colombia. We also need you to push forward on pending deals with Panama and South Korea.
Washington has sat on a fence for long enough. Do we support trading goods and services with our allies? Or are we cowering isolationists who want to isolate ourselves from the rest of the world?
Almost three years ago, the United States and Colombia signed this important trade pact. Since then, Congress has refused to give the agreement as much as a yes-or-no vote.
At long last, we need a vote—and we need a vote of “yes.” Colombia is a nation of 45 million consumers. They can’t produce all of the beef they would like to eat. They rely on foreign suppliers. Ranchers in Brazil and Canada are delighted to meet this need.
So are Americans. Yet most of our beef faces a tariff of 70 percent. That’s a high barrier to access. Under the trade agreement, however, this hurdle would immediately fall. Then it would begin to vanish over time. Farmers and other Americans who depend on exports would see benefits as well. All of us would enjoy a new market—and experience an important boost during a time of global recession.
A successful agreement with Panama also would help. For ranchers, however, the big prize is South Korea. Its population is only a little larger than Colombia’s, but the country is wealthier and it imports much more beef. Recently, we’ve exported about 5,000 metric tons of beef to South Korea per month. That’s a good figure, but also a little less than what it was a few years ago, before the scare over mad-cow disease. That unfortunate controversy cut our exports drastically. We’re still recovering.
A successful trade agreement, however, would put all of those difficulties behind us. We would sell U.S. beef to Koreans like never before. Closer economic ties might also make it easier to negotiate tricky details, such as encouraging Korea to raise its cattle-age restriction from 20 months to 30 months.
Trade is an ideal kind of economic stimulus. It doesn’t require our government to spend money that it doesn’t have. It won’t run up our national debt by a single penny. It’s the furthest thing there is from a bailout. It merely asks our government to remove politics from trade, and to let sellers in the United States find buyers in Colombia, Panama, and South Korea.
We can’t let this chance slip away. South Korea has just announced it has signed a trade pact with India. Before that, the South Koreans finished a deal with the European Union. We should not continue to dawdle as these countries gain special advantages.
I’m sure that between now and September 15, when your Federal Register comment period comes to an end, you’ll give these trade agreements a good deal of thought. And I hope that on September 16, you’ll resolve to see them passed.
Each day of delay costs Americans a little more economic opportunity.
Carol Keiser
Carol Keiser owns and manages cattle feeding operations in Kansas, Nebraska and Western Illinois. Mrs. Keiser is a Truth About Trade & Technology board member. (www.truthabouttrade.org)

Ballots Instead of Bullets – Vote for Trade!

Aug 06, 2009
We’ve just concluded America’s bloodiest month in Afghanistan since the war against the Taliban started eight years ago. Forty-two U.S. service members died in July. Casualties among allied forces and Afghan civilians have spiked as well.
This burst of violence has several sources. The most important may be an upcoming event: On August 20, for only the second time in its history, Afghanistan will hold a presidential election. The Taliban objects to this democratic idea. Instead of offering a candidate for voters to accept or reject, it runs a campaign of murder and mayhem.
The immediate goal is to make sure that the Taliban fails--and the election is a success. Over time, the hope is to bring peace and stability to a troubled nation.
That will require an ongoing commitment from the United States and NATO. It also demands a lot of creative thinking. Thankfully, Democratic congressman Chris Van Hollen of Maryland has put forward a modest proposal to increase the flow of trade. It would allow the Afghan people do more to help themselves.
I’ve never traveled to Afghanistan, but I’ve worked from a distance on a project to build its agricultural infrastructure. I have colleagues who have been there for extended stays and I leverage off their first hand insights. After more than a generation of constant warfare, the country has few of the basic resources that farmers in the developed world take for granted. The roads are not reliable. The lack of processing and warehousing equipment makes it almost impossible for growers to sell perishable goods to consumers who don’t live close by or to extend the marketing season.
It’s easy to imagine Afghanistan developing a vibrant trade in several commodities, such as pistachios. Right now, Iran is the world’s leading pistachio producer. Wouldn’t it be nice to see a democratic Afghanistan cut into the market share of the ayatollahs? It can happen--but only if farmers in Afghanistan gain access to the proper cleaning, sorting, and packaging tools. The same would be true for many types of fruit and citrus as well as other nut crops. The country is diverse in natural resources, but the market infrastructure is lacking.
If we don’t improve the ability of farmers in Afghanistan to move their products from field to market, they will continue to resort to what is already their region’s best cash crop: heroin poppies. Moreover, many of them will remain in a state of economic desperation--the very plight that Taliban recruiters have found so helpful to their foul cause.
The bottom line is that the people of Afghanistan, whether they work on farms or in factories, need more economic opportunities--and Americans can take small steps to help them.
Van Hollen’s proposed legislation, which has bipartisan support, would create “Reconstruction Opportunity Zones” in Afghanistan (as well as neighboring Pakistan). A limited number of textiles produced in these areas would enter the United States without having to pay tariffs for the next 15 years.
A similar effort in Jordan spurred a boom in light manufacturing. The theory is that these trade advantages would stimulate the Afghan economy and create the conditions for foreign investment. Several strong and dedicated NGO's are working there now but conditions must be improved to support sustainable investment and long term commitments of expertise.
Unfortunately, Big Labor is flying its protectionist flag. Van Hollen has tried to appease the union bosses by demanding that the opportunity zones meet certain labor standards. This could become a fool’s errand: Enforcing labor standards in Afghanistan is like trying to grow a vegetable garden on the moon. Republican senator Charles Grassley of Iowa has raised sensible questions about whether the bill’s restrictions go too far, and whether they will set a poor precedent for future agreements with other nations.
The good news is that Van Hollen and Grassley agree on the principle that trade is better than aid--and that export opportunities hold great promise for ordinary workers in Afghanistan. If they can work out their differences, they may deliver a small boost to a distressed nation in a challenging period of transition.
Americans would benefit as well. On the national-security front, a more prosperous Afghanistan makes for a safer world. In addition, a growing economy requires goods and services of the type that Americans routinely make and sell abroad. The project I worked on included bids and spec sheets from US equipment manufacturers to compete for substantial business. Over time, opportunity zones could give birth to two-way trade.
The people of Afghanistan are trying to replace bullets with ballots. In Congress, our lawmakers should support them--and vote for trade.
Reg Clause 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)
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