“To be or not to be” is a quote from Hamlet written by Shakespeare. My message this month is about trade relations or in the words of Shakespeare, “To trade or not to trade.”
Looking at last year’s presidential campaign and the first weeks of the Trump administration, one could question if both Democrats and Republicans are running from so-called free trade agreements. This seems odd considering trade agreements were passed under each of the previous administrations.
The United States is a land of abundance and of great ability to produce products. We need to develop trade relations around the world. But how do we do it in the most equitable way for longevity and success for all sectors of our economy and our trading partners’ economies? This is the challenge.
When it comes to trade deals, most of you have heard the phrase “fair trade rather than free trade.” This is aimed at achieving greater success in trade relations without winners or losers.
NDFU firmly supports the concept of fair trade. We do not develop strong trading partners when trade deals disadvantage a sector of our economy or disrupt the commerce of another country. Having strong economies in other countries is essential to having customers for our products.
Studies show that three previous trade agreements – NAFTA, CAFTA and bilateral trade – have some weakness. Only the NAFTA agreement has attained a gain in exports over imports for a farmer producer. All three of the agreements attained a gain for processed food exports over processed imports. It could easily be suggested that processors do much better under trade agreements than farmers that produce the raw commodity.
It could also be suggested that processors love trade agreements as they get access to more commodities at lower prices. This is the concept of driving commodities to the lowest common denominator by creating access to more supply. It is a stretch to suggest that processors share their newfound market profits with farmers who supply them with those commodities.
Fair trade looks at all aspects of the agreement to ensure the greatest benefits for all nations involved. The three most common aspects that are left out include: currency manipulations or no currency variation factors; humanity and labor equity; and penalties for lack of compliance. Leaving these to the whims of the market or to a non-democratic government is not in the interest of family farm agriculture.
From our perspective, trade is essential. It is also necessary that family farmers and ranchers be represented at the table in all trade negotiations. We should not negotiate a deal that exploits any one sector of an economy for the benefit of another and we need to strengthen other countries’ buying power so they can be our future customers.
Trade is a big issue at play because of the dialogue from the presidential election and our new administration. Do not ignore the opportunity to provide politicians with your input to make trade better for family farmers and ranchers.
– NDFU President Mark Watne