Farmers and ranchers have a long history of promoting American strength and goodwill through international trade. Thanks to our ability to satisfy demand here and abroad, U.S. agriculture is one of the few sectors that can boast a positive trade balance, overall shipping out more than we bring back in. The balance could shift, however, if political barriers stand in the way of agricultural trade.
Getting markets open for business
U.S. agriculture is ready for a boost in activity in the Asia/Pacific region. This area holds great promise, and it makes no sense to limit access to food here or anywhere else. The Trans Pacific Partnership promises to open up trade among the U.S., Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and Japan. But the real success of TPP negotiations rests on an agreement between the U.S. and Japan, which would require Japan to resolve its long-standing tariff and non-tariff barrier issues. Price restrictions and high tariffs have been the standard for too long, and Japan will have to play on the same terms as other participants for the TPP to work.
The European Union is also primed for growth. Last year, U.S. agricultural exports to the EU totaled $11.5 billion compared to $17.3 billion in EU agricultural exports to the U.S. American farmers and ranchers are ready to be competitive here, but the EU system has stubbornly held to guidelines that are based in politics rather than science.
Although the U.S. and the EU both follow the safety guidelines set out by the World Trade Organization, the EU tacks on a “precautionary principle,” which allows it to add non-scientific guidelines to risk management. Match this with its snail’s pace for approving biotech products, and it is not surprising that we’ve seen a significant drop in corn and soybean exports. For U.S. food products that do make it over to the EU, the use of geographic indications can put some at an unfair disadvantage, limiting their marketability.
Standing firm in negotiation
No trade agreement can be fully successful without the support of agriculture. In September, AFBF’s Trade Advisory Committee met with EU officials in Brussels, where we urged them to remove unnecessary trade barriers once and for all and to move forward with the Transatlantic Trade and Investment Partnership. A free trade agreement between the U.S. and the EU can bring a serious boost to U.S. agriculture, but only if politics are set aside.
AFBF also met with several ambassadors and the WTO director-general in Geneva where we affirmed U.S. support for completing the Trade Facilitation Agreement, an accord that would eliminate many antiquated customs procedures that serve no useful purpose. The agreement is currently on hold thanks to India—which originally signed on with all other WTO countries back in December but is now delaying the ratification. U.S. agriculture is ready for ambitious trade negotiations. Hanging onto failed ideas that place certain agricultural sectors at a disadvantage or create special exemptions for developing countries is no way to move forward in today’s marketplace.
Waiting for trade negotiations to conclude can feel a bit like watching paint dry, but persistence pays off. A recent agreement between the U.S. and Brazil has resolved Brazil’s complaint to the WTO and ended years of uncertainty for America’s cotton growers. Thanks to the support of the U.S. government, the current structure of commodity programs remains intact. We must continue to hang tough in trade negotiations to keep the marketplace open to the American farmer.