Free Trade’s Cheap Talk
Posted on November 4, 2015
Most U.S. farm and commodity groups aren’t clear on the exact elements of the just agreed-upon Trans-Pacific Partnership. That lack of understanding, though, hasn’t stopped any from praising this “new, high-standard trade agreement that levels the playing field for American workers and American businesses.”
For example, our good friends at the National Cattlemen’s Beef Association say the TPP “will immediately reduce tariffs and level the playing field for U.S. beef exports to these growing markets.”
It can’t come too soon for American cowboys because recent free trade deals—NAFTA (Canada and Mexico); KORUS (South Korea); and CAFTA (Central America)—are flooding the U.S in beef.
In fact, U.S. Department of Agriculture data shows U.S. beef imports for Jan. through July, 2015, nearly 33 percent higher than the same period in 2014, 2.16 billion lbs. now versus 1.6 billion lbs. then.
Moreover, U.S. beef imports from our new TPP partners over the same period show Australia beef up 55 percent, New Zealand up 15 percent, Canada up two percent, Mexico up 39 percent, Japan up 108 percent, Argentina up 46 percent and Chile up 145,579 percent.
Those revealing numbers, however, didn’t stop the NCBA’s Sunshine Boys from proclaiming that “With the completion of this [TPP] work, NCBA looks forward to increased demand and growth for beef exports across the Pacific Rim” because “(b)eef exports currently add over $350 to each head of cattle sold in the U.S.”
Even if accurate, that highly debatable number still won’t cover today’s nearly $500-per-head losses in slaughter cattle, most of which is tied to soaring beef imports, too-high retail beef prices, and a strong dollar.
Relief will be a long time coming under TPP because, as Bloomberg News reported Oct. 6, the richest “Pacific Rim” target, Japan, will see its “tariffs on beef… cut to 9 percent over 16 years from 38.5 percent.”
Really? A tiny 1.84 percent tariff drop per year for 16 years? That’s a slap in the face, not a cut in tariffs.
These easy-to-find challenges to NCBA’s silly Trans-Pacific cheerleading point to several underlying myths at the heart of Big Ag’s rock-ribbed belief that free trade is the past, current, and future salvation of American farms and ranches.
One myth is that all U.S. farm and ranch profits are tied directly to free trade. The Obama White House made that connection again Oct. 5 when it noted “roughly 20 percent of all farm income in the United States,” is “provided” by “exports.”
True, but farm income is not farm profit. If it were, U.S. net farm income would have risen when ag exports rose from $141 billion in 2013 to $152 billion in 2014. Instead, U.S. net farm income fell from $135 billion to $126 billion in that period.
Another myth about free trade is that trade agreements are about freedom to export. In truth, most trade deals “specify who will be protected from international competition and who will not,” explains the Economic Policy Institute in its overview of the TPP.
Clear evidence comes from America’s giant neighbor, Canada whose ag minister announced his dairy and poultry farmers will be compensated for “any losses” caused by TPP before the deal was even signed. It confirms Nobel Prize-winning economist Joseph Stiglitz’s long-held belief that free trade deals are “managed trade agreements, tailored for corporate interests…”
American farmers and ranchers know this in their bones but not their hearts. They are farmers and ranchers, not exporters. Big Agbiz—Cargill, JBS, Smithfield, ADM and the like—are global buyers and sellers who, when able to play both sides of any trade-leveled playing field the world over, rarely lose.
Maybe that’s why the Big Boys aren’t saying squat about the TPP; they got everything they demanded during negotiations. Now they want you to pressure Congress to pass it for them and their shareholders.
In fact, they’re betting on it and, already, their bets are paying off.
© 2015 ag comm