Anxious for leadership
May 18, 2017
by Bernard Shire
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While realizing how critical international trade is becoming to American agriculture, the industry, including meat and poultry processors, has asked President Trump to appoint an Undersecretary for Trade and Foreign Agricultural Affairs. The processing industry is also asking Trump to modernize the trade structure at the US Dept. of Agriculture.
This attempt to expand American agriculture’s strength in international trade began five days after Trump took office. A coalition of 133 organizations in the agricultural and food industry asked the new President to redo, but not scrap NAFTA, the North American Free Trade Agreement that exists between the US, Canada and Mexico. The agreement could be better, according to most who signed the letter.
Signing the letter were major industry players, like Tyson, Cargill, Smithfield and trade groups representing the industry, like North American Meat Institute, National Pork Producers, National Chicken Council, National Turkey Federation, US Meat Export Federation and National Farm Bureau Federation.
The groups said agricultural exports have produced a trade surplus over the last 50 years. In 2015, the most recent year of record, exports totaled $130 billion, leading to almost half a trillion dollars in economic activity here. During the last quarter century, the amount of American food exported around the world has risen in both amount and dollar value.
The groups noted that while there are some tariffs that can block American exports, for the most part, NAFTA has brought “a windfall” to food producers, including meat and poultry processors, and to farmers. Since NAFTA began operating, US food and agricultural exports to Canada and Mexico increased more than four times, from almost $9 billion 14 years ago, to almost $40 billion in 2015. President Trump promised during his campaign to renegotiate key American trade deals. He called NAFTA “a disaster.” Canadian and Mexican leaders say they’re ready for discussions, so it seems NAFTA will be renegotiated and changed, rather than eliminated.
More recently, a smaller number of American agriculture groups, including some meat and poultry trade groups, put their finger on another aspect of international trade that could use some fixing. These groups are asking the President to modernize the trade structure at USDA.
The letter said, “The US food and agriculture industry is ideally positioned to achieve significant growth in the decades ahead, given projected population growth of an additional 2.5 billion people worldwide by 2050.”
They told Trump that significant changes are needed to keep existing foreign markets and gain access to new emerging markets for American food and farm products. The organizations sending the letter said they support the provision in the 2014 Farm Bill requiring the Secretary of Agriculture to establish an Under Secretary for Trade and Foreign Agricultural Affairs.
“Such a position will bring high level representation to key trade negotiations with senior, foreign officials and within the US Executive Branch of government,” they said.
This seems like an easy step that should be taken by the Administration. Overseas markets represent 95 percent of the world’s customers, 87 percent of the economic growth and 73 percent of the world’s purchasing power. This new Under Secretary for Trade Affairs position should be established quickly. And a highly-qualified person for the job should be appointed. Then the work of modernizing USDA’s trade operations can begin.