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.
Trade Will Strengthen the State of the Union
Feb 14, 2013
By Tim Burrack: Arlington, Iowa
The pundits are still working through the details of Tuesday’s State of the Union speech, in which President Obama called for raising the minimum wage, fighting climate change, and fixing health-care costs.
If nothing else, the address will give Democrats, Republicans, and independents plenty to talk about.
As a farmer, however, I am really interested in two parts of the speech right now: We need more trade and better infrastructure.
They’re closely linked--and they’re essential to economic growth.
Just a few hours before the speech, North Korea tested a nuclear device. The President didn’t say much about it on Tuesday night, but he sounded an important theme: "Even as we protect our people, we should remember that today’s world presents not only dangers, but opportunities."
One of the best opportunities, he rightly said, is free trade.
The same Korean peninsula that poses a provocative threat is home to one of America’s chief trading partners. South Korea is a rising nation of 50 million consumers--and a great place for Americans to sell goods and services.
We’re doing it more than ever before, thanks to a new free-trade agreement. President Bush initiated it and President Obama and Congress completed it a little more than a year ago, fulfilling a promise the President made in an earlier State of the Union address. The pact is now expanding export markets and helping create tens of thousands of jobs in the United States.
And we can do even better in the region and beyond. President Obama touted the Trans-Pacific Partnership. This was no surprise because he has made a habit of talking up the TPP, which aims to lower trade barriers around the Pacific Rim.
Yet the President didn’t merely reprise an old theme. He also proposed an ambitious new idea: "Tonight," he said, "I am announcing that we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union, because trade that is free and fair across the Atlantic supports millions of good-paying American jobs."
Trade between the United States and Europe is currently worth about $900 billion annually. Some experts believe that lowering tariffs on goods and services could boost this figure by 50 percent. For American farmers, whose sales to Europe totaled $12 billion last year, there is also the tantalizing possibility that a strong agreement on agriculture could encourage Europeans to become more accepting of GM crops, which are harvested around the world but still resisted in Europe due to anti-scientific prejudice.
These are big and worthy goals. If President Obama achieves just one of them in his second term--either TPP or a free-trade agreement with the EU--he will leave behind an impressive legacy on trade. If he achieves both, he may go down in history as one of America’s great trading presidents.
Congress should do what it can to help out. It can start by approving Trade Promotion Authority. Even though the President didn’t ask for TPA in his speech, he’ll need this legislative tool, which limits Congress to give a final up-or-down vote to any trade pact that the administration negotiates.
Even the best trade deals won’t be maximized if the United States lacks a world-class infrastructure. President Obama spoke of America’s "deteriorating roads and bridges." He also mentioned the need for "modern ports to move our goods." These are indispensible: About 75 percent of American exports travel through U.S. ports.
The President didn’t discuss inland waterways, but they’re essential too. The American Society of Civil Engineers claims that their poor quality cost businesses $33 billion in 2010, and that this price will soar to $49 billion by 2020.
The locks that are supposed to assist river traffic are woefully inadequate: The average age of federal locks is 60 years. They’re practically senior citizens. In seven years, says The Economist, more than 80 percent of these locks will be "functionally obsolete."
Businesses – including agriculture - rely on efficient transportation. As a farmer, about one-third of our corn goes to customers in foreign lands, along with so much of what we grow. On my farm, one out of every three rows of corn that I plant is sold and shipped somewhere else. We count on our rivers and ports to help make these sales.
Trade and infrastructure are inseparable--and we need them both if we plan to strengthen the State of our Union.
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.
Note: a version of Burrack's column appeared online at USA Today on February 13.