Trade from various angles is still top-drawer news for the meat production chain.
To start with, one could be forgiven for assuming that once the World Trade Organization ruled against the U.S. mandatory country-of-origin labeling law four times — twice each on the original regulatory rule and twice more on the revised version — the issue was settled. With Canada and Mexico entitled to slap billions of dollars in (100 percent) tariffs on beef, pork, chicken and a list of other American products going into those countries this fall, one would think Congress would get the message: You tried the impossible, unnecessary and expensive, and it didn’t work. Now give it up and repeal it.
The House got the message. The Senate — at least some senators — have not. With the clock ticking toward retaliation by September or October, Sen. Debbie Stabenow (D-Mich.) is still running desperate rags up the flagpole, wanting to revise the revised revisions of the rule. Maybe it sounds a little harsh, but we would agree that Dick Morris’ new litmus test for Supreme Court justices should also be applied to senators — a literacy test! What part of 100-percent tariffs do they not understand? The cost could run from $3 billion to $4 billion or more — a tremendous blow to the meat industry and no help to the general economy.
It’s not clear what Democrats might still follow whatever lead Stabenow eventually provides. Several other Republican senators are giving proponents of repeal some heartburn: Sens. Grassley (R-Iowa), Hoeven (R-N.D.), Enzi (R-Wyo.) and Thune (R-S.D.). At present, no Senate bill is out of committee, much less scheduled for a floor vote. There is still time to contact your senators.
As for the Trade Promotion Authority (TPA), getting it through Congress was more difficult than many expected. There was a lot of confusion surrounding the TPA, through which Congress gives primarily the U.S. Trade Representative’s office the authority to negotiate trade treaties, subject to a list of instructions emanating from various Congressional committees and amendments to the bill. That way, the negotiators have fair warning about what Congress would like to see in a trade treaty before it comes to the chambers for an up or down vote.
What was uninformed confusion and what was deliberate disinformation — sabotage, if you will — was not always easy to figure out. TPA was a published, 118-page bill. But there were screamers out there protesting the TPA as a “secret” bill only a few Congressmen had read, signed in and taken oaths not to talk about. The Trans-Pacific Partnership (TPP) is a trade treaty that has been under negotiation for a decade — long before Obama was president. It is not finished, which is why it can be viewed by members of Congress for oversight purposes but is not yet public, any more than a movie that is not finished is available for the public to view. Once the treaty is finished, then it will be made public 60 days before a Congressional vote. Contrary to the yells about secrecy, there will be a lot more known about any trade treaties than there was about a certain 2,400-page health care bill with hours to read it.
The word is now that the rest of the countries involved in TPP negotiations know that the United States is serious and has a process in place, a big TPP conference is scheduled for the end of July. It is hoped that a final agreement can be reached by the end of that conference. With luck, by November or December, it could be up for a vote.
The TPP treaty is important to U.S. agriculture because fate has given us a rare opportunity with Japan. Prime Minister Shinzo Abe, facing an economy stalled for over 20 years and debt twice its GDP, has staked his political career on overhauling and jump-starting the country’s economic system. Part of his overhaul is using the pressure/lure of a TPP agreement to force restructuring of Japan’s convoluted, centuries-old maze of agricultural production and distribution pathways. He has also indicated willingness to eliminate or greatly reduce the 38 percent tariff on American beef, plus reductions in pork tariffs.
After the battle for TPA, it is obvious that in order to get any trade treaties through Congress, a major education effort needs to begin immediately on how basic trade works (comparative advantage) for win/win situations, why it works (efficiencies, national skill sets, natural resources, climate, traditions), why global trade is now critical, plus how competition creates efficiency at both ends and results in the best products and services for consumers.
The most important thing to remember, which is also the bottom line, is that everything must be weighed with the consumer in mind. The consumer/citizen/taxpayer is the only source of revenue for all industries, companies and labor forces. They are the top of the pyramid, the source of all money. No individual industry or workforce is guaranteed a thing. An industry can protest all it wants for artificial protectionist barriers, but the capitalist or free market system puts the consumer in charge, deserving and expecting the widest array of products at all the price points available worldwide. In the long run, that's what they will get, too. Today's global communications and shipping guarantee that. One can’t build a wall around a country in today’s world. China and Japan could do it centuries ago and woke up one day to find themselves hundreds of years behind the rest of the world.
Our biggest problem is the tyranny of the minority. Labor unions are only a small, single-digit percentage of the workforce and environmental zealots produce nothing and protect little not already protected to a great degree, yet these tiny fractions of the economy and culture are perilously close to running everything. A treaty with Asian countries or Europe will require education and pressure on the public and Congress if we are to get any more trade deals and move the economy and our industries forward.