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Commentary: Three key reasons show why farmers favor free trade

Issue Date: September 28, 2016
By Kari Barbic and Veronica Nigh
Kari Barbic
Veronica Nigh
Japan is one of 12 nations participating in the Trans-Pacific Partnership, a trade agreement awaiting ratification by the U.S. Congress. American Farm Bureau specialists say free-trade agreements remove barriers that help U.S. farmers reach new customers in foreign markets.
Photo/TK Kurikawa, Shutterstock.com

America's farmers and ranchers support free trade. And when you look at the numbers, it's not hard to see why.

Between 2003 and 2015, U.S. agricultural exports to countries with which we have trade agreements increased more than 136 percent—from $24.1 billion to $57 billion. During the same time period, U.S. agricultural exports to countries where we don't have trade agreements (excluding China) only increased by 84 percent.

Here are three key reasons farmers support free trade:

  1. Trade agreements generate more agricultural business—a lot more.

    Farmers and ranchers do more business where the U.S. has established free-trade agreements. More customers equal more business: Logic alone makes that case. But the numbers backing up the facts and logic are staggering.

    In the 20 years following the signing of the North American Free Trade Agreement, our total exports to Canada and Mexico have quadrupled, growing from $8.9 billion in 1993 to $38.6 billion in 2015. The U.S. enjoys a 65 percent market share in the NAFTA market, compared to our market share in countries where we don't have a trade agreement, 11 percent.

    Before NAFTA, Canada was the fourth-leading U.S. market. It is now the No. 1 market for our agricultural exports, and by far the largest U.S. market for high-value, consumer-oriented products. Mexico's imports of feedstuffs from the United States are closely linked to its quickly growing poultry and pork industries. It is the top market for U.S. corn, soybean meal and poultry, as well as the second largest market for U.S. pork.

    But North America isn't the only place agricultural business has picked up, thanks to free-trade agreements. In Asia-Pacific countries such as Singapore and Australia, where we have trade agreements, U.S. agricultural exports have more than doubled and tripled, respectively.
     
  2. We need trade agreements to level the playing field for our goods abroad.

    Though American-grown food, fuel and fiber are prized around the world for quality and value, high tariffs and non-scientific trade barriers place our products at a disadvantage in countries where we have no free-trade agreement. Why buy the best, when you can get second-best at half the cost?

    We don't have to look far from our shores to see how this plays out. In Cuba, financing restrictions on U.S. products have placed us behind other countries in trade there. The U.S. share of the Cuban market has slipped dramatically, from a high of 42 percent in the 2009 fiscal year to only 16 percent in fiscal year 2014. The United States is now Cuba's third-largest supplier, after the European Union and Brazil.

    Without agreements that look out for American business, other countries quickly turn to more accessible markets. Other countries will, and do, trade freely without us. The negotiating table, not the podium, is the place for tough talk that protects American businesses and increases our reach to markets abroad. But it's harder to be taken seriously in those negotiations if we don't swiftly pass deals that have been hammered out for the overall good of the U.S. economy.
     
  3. Agricultural exports support jobs on U.S. soil, beyond agriculture itself.

    Increasing trade is good for U.S. farmers and ranchers, as well as for the jobs and industries agriculture supports. The U.S. Department of Agriculture estimates that every $1 billion in exports supports 7,550 American jobs throughout the economy. That means increased exports to FTA partners have added nearly 250,000 jobs to the U.S. economy.

    Agriculture is not an isolated industry: It's integral to thousands of businesses. Consider a bottle of Kentucky bourbon. Beyond the farmers growing the corn from which bourbon is distilled, there's white oak barrel construction for aging the spirits, and glass-making for the final bottling and distribution. Each is a separate industry representing skilled workers—workers who probably wouldn't identify themselves as part of the export business. But that's just what they are as soon as a batch of Maker's Mark is shipped to Japan.

    Increasing international trade also benefits consumers, with access to more competitively priced products, new varieties of food and offseason supplies of fresh produce.

    Farmers and consumers alike can look at the numbers and do the math. Free-trade agreements make sense if we want to see more competitive prices, a variety of goods in our own marketplace and greater yields for American-grown businesses.

(Kari Barbic is a media specialist and Veronica Nigh is an economist at the American Farm Bureau Federation.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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