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December 2013 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.

Fighting Hunger to Achieve Peace

Dec 26, 2013

 Gabriela Cruz:  Elvas, Portugal

As the Christmas season is celebrated around the world the wish for "peace on earth" is expressed by many.  As I hear these words repeated, it brings to mind a comment made by Dr. Norman Borlaug when he accepted the Nobel Peace Prize in 1970: "If you desire peace, cultivate justice, but at the same time cultivate the fields to produce more bread; otherwise there will be no peace."
We can’t hear this message enough—especially in Europe, the home of a nonstop war on biotechnology.
One of my top moments of the year came when Cardinal Peter Turkson spoke at the World Food Prize in October. As a Catholic and Portuguese farmer who was in the audience, I was thrilled to hear a prominent leader of my church speak so favorably about genetically modified food.
My appreciation for his words only has grown since then—and they seem especially fitting now, as we celebrate Christmas and pray for peace on earth.
Cardinal Turkson heads the Pontifical Council for Justice and Peace, an arm of the Vatican that promotes Catholic social thought, dignity and action.
The Cardinal avoided the nitty-gritty details of the debate over GM food, but he made clear that the Roman Catholic Church fully supports the use of biotechnology in agriculture as one of the best ways to fight hunger, which Pope John Paul II called "the first and fundamental form of poverty."
Cardinal Turkson included many references of comments made by Pope John Paul II, who spoke as early as 1982 about the advantages of "the new techniques of modification of the genetic code" and "the formation of new vegetal species for the benefit of all."
Five years later, the pope elaborated: "The findings of science must be put to use in order to ensure a high productivity of land in such a way that the local population can secure food and sustenance without destroying nature." Finally, in 1990, he referred to how "other plants possess value as sources of food or as a means of genetically improving strains of edible plants."
More recently, the Vatican’s Pontifical Academy of Sciences has given its blessing to GM crops, praising GM food for its "great potential to improve the lives of the poor."
Cardinal Turkson continued in this tradition. He praised Borlaug for launching the Green Revolution and lauded the three winners of the 2013 World Food Prize for their role in the Gene Revolution: "We have reason today to congratulate … and to commend them for carrying on the legacy of Dr. Borlaug, putting biotechnology and research towards improving food production."
Not everyone sees it this way, of course. Earlier this month, an EU court assaulted modern food production again when it revoked an earlier decision to permit the planting of a perfectly safe GM potato. The Cardinal mentioned the strong opposition to GM crops: "Never before, having accepted an invitation, have I received so much mail, some of it urging me to withdraw."
Yet Cardinal Turkson refused to withdraw. He traveled to Des Moines and delivered his remarks, calling for conversation between the friends and foes of biotechnology. "May I cite my own African experience of ‘palaver’?" asked the native of Ghana. "Palaver is the extremely patient and thorough exploration of a whole problem until one reaches a consensus. … All the stakeholders must be represented around the palaver circle—a circle characterized by humble and respectful listening, honest speaking, reconciliation of deep differences—a circle of true collaboration."
Let’s pledge that 2014 become a year of palaver—and hope that the critics of biotechnology at last come to understand that farmers and consumers must have this tool of science and agriculture.
"The world needs everyone," said Turkson, "to stay at the table and solve these issues, rather than abandon the dialogue and leave the world’s poor at an empty table."
These words carry special weight because so many people look to the Vatican for moral leadership. Catholics certainly do, but so do many non-Catholics—and we were reminded of this important fact when Time magazine selected Pope Francis as its Person of the Year. "In a very short time, a vast, global, ecumenical audience has shown a hunger to follow him," wrote Nancy Gibbs, the managing editor.
I am hopeful that this global audience will be open to collaboration and follow the Roman Catholic Church’s lead on biotechnology.  Eliminating hunger as we work for peace is a worthy goal.
Maria Gabriela Cruz manages a 500 hectare farm in Elvas, Portugal that has been in their family for over 100 years.  Growing maize, wheat, barley and green peas, they use no-till or reduced till methods on the full farm.  She has grown biotech maize since 2006. Ms. Cruz is President of the Portuguese Association of Conservation Agriculture, a member of the Truth About Trade & Technology Global Farmer Network and the 2010 Kleckner Trade & Technology Advancement Award recipient (www.truthabouttrade.org).
Follow us: @TruthAboutTrade on Twitter | Truth About Trade & Technology on Facebook.

The Truth About Technology & Trade With China

Dec 19, 2013

 By Tim Burrack: Arlington, Iowa

Tensions around the Pacific Rim have taken a sharp turn for the worse, ever since China declared a new air-defense zone and projected its power over a small set of islands in the East China Sea.
Vice President Joe Biden rushed to Beijing to confer with Chinese President Xi Jinping, but nothing seems to have come of their meeting. Diplomats in Australia, Japan, and South Korea now worry that China’s sudden aggression will lead to a conflict.
In a separate incident, unfolding below the headline-grabbing island dispute and possibly obscured by it, China fired shots in an economic war: It rejected several shipments of corn grown in the United States, in a trade spat that hurts American farmers and threatens the future of food production and distribution through trade.
China is the world’s most populous country, and in recent years it has become a major importer of corn, mostly used for animal feed. Just six years ago, the Chinese were still net corn exporters. In recent days, however, they’ve turned away more than 120,000 metric tons of U.S. corn, spread across at least three provinces and five cargoes. Inspectors refused the corn because they discovered a trait for pest resistance that China has not yet approved.
On the surface, this looks like just another episode in the global controversy over genetically modified crops.
But that’s not the real reason for China’s destructive behavior. This is a trade issue. It’s simply playing economic hardball, trying to escape from purchase contracts it signed months ago when corn prices were higher. And it’s using a phony fuss over biotechnology to distract us from this important reality.
The technical name of the corn in question is MIR162. It contains a trait that fends off insects, building stronger and healthier plants that produce more grain. As with so many GM crops, regulatory agencies around the world have approved this one for planting, harvesting, and consuming. It’s just another safe crop made possible by the remarkable advances in biotechnology, helping us grow more food on less land.
In other words, MIR162 is a conventional tool of modern agriculture. People in the United States, Argentina, Brazil, the European Union, Japan, and Mexico rely on it.
Yet China has not approved it for import. Its regulators have failed to cite any concerns about quality or safety. Instead, they simply have dawdled on an application they should have been approved long ago.
The Chinese probably would not behave this way if corn were selling for $7 per bushel, as it was earlier this year. Today, however, corn sells for about 60 percent as much—and so the Chinese have decided, with astounding cynicism, to use biotechnology as a trade barrier so they can cancel purchase contracts.
This is bad-faith behavior. It violates the norms of acceptable business practices and slashes the value of American goods, hurting the farmers who grew the corn in the first place.
Meanwhile, the media’s coverage of the incident has suggested that the dispute amounts to nothing more than a new wrinkle in the debate over the safety of biotechnology. The unspoken assumption is that fair-minded Chinese regulators have honest concerns about the safety of corn grown in the United States.
Let’s be clear: Food grown in the United States is the safest on the planet. Our trade customers have nothing to fear from it.
The U.S. Grains Council has called upon China to admit these corn shipments, and perhaps it will. Yet China’s reneging already has forced Americans to forfeit hard-earned revenues and threaten future shipments.
The long-term answer, however, is regulatory harmonization. Richard Fisher, president of the Dallas Federal Reserve Bank, made this important point in a speech last week.
Around the world, new varieties of crops must pass through a patchwork of approval systems. It’s complex and inefficient—and, as we’re seeing right now with China, it creates opportunities for mischief, this time serving a double-whammy against both trade and technology.
A better system would let a rigorous approval in one responsible country allow for a simpler and quicker approval in another. The devil is in the details, of course, and the undemocratic rulers of China won’t be the first to sign on.
Yet this is the way forward—and it must become a priority in trade talks with our friends.
Tim Burrack raises corn, soybeans and pork on a NE Iowa family farm.  He serves as Vice-Chairman and volunteers as a Board Member of Truth About Trade & Technology (www.truthabouttrade.org).
Follow us: @TruthAboutTrade on Twitter | Truth About Trade & Technology on Facebook.

Saving Doha

Dec 12, 2013

 By Dean Kleckner:  Des Moines, Iowa

Just as South African politician and human-rights leader Nelson Mandela passed away last week, global trade diplomats finished talks in Bali that could pump $1 trillion annually into the economies of developing countries.
Perhaps the spirit of Mandela moved them. At least it’s nice to think he somehow helped bring Doha back from the dead, reviving the moribund Doha Round of world trade talks.
Mandela of course is best known for the causes of racial justice and reconciliation. He spent more than a quarter century in prison and emerged from captivity as a hero.
Free trade—or the lack of it—made his story possible. In the 1980s, the nations of the world imposed economic sanctions on South Africa’s white government. Without this hardball approach, apartheid might still be in place and Mandela might have died in confinement.
So Mandela understood the liberating power of buying and selling goods and services across borders.
The 159 members of the World Trade Organization understand it as well, or at least they do in theory. After years of arguing without result, they finally appear to have struck a deal that will make a difference.
Experts call it a "trade facilitation" agreement, which means that its implementation will reduce red tape at ports and border crossings. A representative of the Airforwarders Association, which represents air-freight companies, told Bloomberg News that importing items into a few countries can require filling out as many as 30 forms, some of them available only on paper (as opposed to electronically).
The Bali deal should improve this sorry state of affairs. Making the rules of customs easier and more transparent also should cut down on corruption.
Taken together, these reforms will reduce trade’s transaction costs, which, according to some estimates, impose the functional equivalent of a 10-percent tariff.
The Peterson Institute estimates that better trade facilitation will boost worldwide commerce by as much as $1 trillion per year. Developing countries will benefit the most, especially in sub-Saharan Africa, because they have the most to gain from modernizing their customs procedures.
Even so, President Obama hailed the WTO’s accord as good news for American small businesses, which can have a hard time deciphering complex trade rules and navigating antiquated systems. U.S. firms that specialize in logistics may see an uptick in their revenues, as countries work to enact reforms.
Given the original high hopes of the Doha Round, this is an exceedingly minor deal. The Washington Post called it "modest by any measure," and that’s a pretty good assessment.
Yet a little bit of something is better than a whole lot of nothing—and up until now, the Doha Round has been a spectacular failure.
That’s why so many participants hailed the Bali agreement less for what it delivers as for what it symbolizes.
"For a small package, this is actually a big deal," said U.S. Trade Representative Michael Froman, in the Wall Street Journal. "I think it demonstrates that the WTO can work and hopefully will lead to other, maybe even bigger deals going forward."
Roberto Azevedo, who became director-general of the WTO three months ago, echoed this idea: "This package is not an end. It’s a beginning," he said. "As a consequence of our progress here, we’ll now be able to move forward on the other areas of our work that have been stalled for so long."
That remains to be seen. The Bali talks nearly flopped, ending in small-bore success only because the United States and India agreed to put off a confrontation over India’s agricultural subsidies, which desperately need an overhaul.
Moreover, the greatest advances in global trade are taking place outside the WTO’s purview, in regional agreements such as the Trans-Pacific Partnership (TPP), which would encourage trade along the Pacific Rim. For the United States, TPP and a possible agreement with the European Union are the biggest prizes.
Yet it’s good to see Doha spring back to life, at least in a small way and for a short time.
Dean Kleckner is Chairman Emeritus for Truth About Trade & Technology (www.truthabouttrade.org). Follow us: @TruthAboutTrade on Twitter | Truth About Trade & Technology on Facebook.

Constitutional Support for a Strong Trade Agenda

Dec 05, 2013

 By Tim Burrack:  Arlington, Iowa

In the Declaration of Independence, American revolutionaries listed their grievances against the British king. Among his offenses, they said, was "cutting off our Trade with all parts of the world."
What a shame that a few members of Congress now think that another of our founding documents stands in the way of modern trade policy. In a letter last month, they actually claimed to believe that Trade Promotion Authority (TPA) violates the Constitution.
This is absurd—and for our export-fueled economy to meet even modest goals in global commerce, we can’t let this bizarre interpretation of the Constitution cut off our trade in the 21st century.
The letter, organized by Rep. Walter Jones of North Carolina and signed by 23 members of Congress, begins plainly enough: "We are strong supporters of American trade expansion. We are also strong supporters of the U.S. Constitution."
So far, so good.
But then the letter veers in a strange direction. It complains that TPA denies Congress the ability to oversee U.S. trade policy.
Nothing could be further from the truth.
Our Constitution, Article I:  Section 8 says that Congress will "regulate Commerce with foreign Nations." And that’s why TPA guarantees that Congress approve any trade treaty before it becomes the law of the land. Under TPA, only trade deals that receive explicit approval from Congress go into effect.
This is not theory, but actual practice. TPA—sometimes going by its earlier name of "Fast Track"—has allowed Congress to vote on all of America’s trade deals, from big ones, such as the North American Free Trade Agreement, to modest ones, such as the accords with Panama and Singapore. None has gone forward without a clear endorsement from Congress.
Taken together, these agreements have strengthened the U.S. economy, creating export opportunities for American farmers and manufacturers and lowering prices for consumers.
They’re also a bipartisan success story, enabling lawmakers to reach across party lines. To expand trade opportunities, President Reagan collaborated with a Democratic majority in Congress and President Clinton worked with a Republican majority in Congress.
TPA is necessary for a simple reason: Our trading partners need to know that when they sit down at the bargaining table with the United States, they’re dealing with a single representative—and not 535 individual members of Congress, many of them embodying narrow interests and promoting separate agendas.
So traditionally the White House works with leaders in Congress to establish the goals of a trade deal. Then our trade diplomats negotiate with representatives from other countries. If they can reach terms that promise to improve our economy, they strike a tentative agreement, which the president submits to Congress for final consideration, in an up-or-down vote.
It’s an excellent system that has worked well for a long time, keeping true to the Constitution and also promoting our economy in a variety of partisan environments.
Congress of course must remain vigilant, always ready to reject a trade deal that doesn’t make sense. This includes agreements that cede too much authority to international organizations. Although every negotiation involves give and take, we must never become party to a pact that surrenders our sovereignty.
International trade is one of the keys to U.S. success—it’s a small bright spot in an otherwise sluggish economy. That’s why our lawmakers must strive to improve the ability of Americans to buy and sell goods and services with people in other countries. Two current negotiations hold great promise: the Trans-Pacific Partnership (TPP) with a group of nations around the Pacific Rim, and the Transatlantic Trade and Investment Partnership (TTIP), which would improve our ties with the EU.
We should hope that both of these talks succeed—but without TPA, neither will move beyond the most initial stages of conversation.
All members of Congress should not hesitate to support TPA, confident that it will boost the economy and fulfill the constitutional imperatives to promote the general welfare and secure the blessings of liberty.
Tim Burrack raises corn, soybeans and pork on a NE Iowa family farm.  He serves as Vice Chairman and volunteers as a Board Member of Truth About Trade and Technology (www.truthabouttrade.org). Follow us: @TruthAboutTrade on Twitter | Truth About Trade & Technology on Facebook.
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