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Key To Beef's Immediate Future - Bubbles on World Stage PDF Print E-mail
Written by Steve Dittmer   
Thursday, 12 February 2009
AFF Sentinel Vol.6#4

I have been telling our supporters and contributors that our Short List of key current issues keeps getting longer. But for those who still need convincing that politics drastically affects their businesses and demands their attention, 2009 is starting out to make them believers.

Beef and other meat trade issues have been close to the surface of trade waters in recent years. Free Trade Agreements from several countries/regions, the Democratic leadership's refusal to even consider most of them and the campaign rhetoric about trade and outsourcing has kept the waters roiled. Now, the global recession is bringing things to a head.

The warnings that AFF and other free trade advocates have given about the bad reactions to trade barriers and restrictions got a dry run in recent days, proving they were not idle warnings. The proponents of a highly regulated trade that protects certain industries or labor groups at the expense of consumers always forget that the very definition of trade involves a two-way, win/win exchange.

No sooner did the U.S. House insert language requiring infrastructure projects funded by the "Stimulus" plan to ""Buy American," than customers and suppliers from all over the world cried foul. Europe, Canada, Brazil and Australia among others protested the House language. Brazil quickly announced 3,000 items would be added to the list requiring import licensing, ("Obama's Trade Deflection," Wall Street Journal, 02/06/09). In fact, the very fact that 3,000 items are only a partial list of items traded into Brazil would underline the interdependence of nations worldwide. Tellingly, the Journal reported Brazilian automakers and electronics manufacturers resisted the retaliatory move because they used imported components to maintain their competitiveness.

Hello, did everyone get that? This was not coming from representatives of the "free trade cult," as one group favoring trade restrictions calls trade proponents. Here are Brazilian businessmen saying in black and white - we need to be able to source components from around the world to stay competitive. And why is that important? To stay in business! And who says so? Consumers worldwide - - who have to allocate sparse earnings to cover as many high quality items as they can. Few consumers see it as the main priority of their household budget to subsidize certain products, companies or industries by paying higher prices than the world market sets.

The Journal reported that such a brawl broke out inside Brazilian President Luis Inacio "Lula" da Silva's administration over the retaliatory list of 3,000 and its potential damage to Brazil's companies, that he reversed the decision, explaining that he did "not want Brazil being identified with protectionism." So which country is demonstrating "political maturity," here, as the Journal put it?

This is in addition to the U.S. beef industry's best customers' unhappy reaction to mCOOL, as both Mexico (#1 customer) and Canada (#2 customer) made plain in WTO actions and reiterated in discussions at the recent NCBA convention.

President Obama, his ears perhaps burning, told Fox News, "I agree that we can't send a protectionist message," the Journal noted. "He added that it would be a mistake `at a time when worldwide trade is declining, for us to start sending a message that somehow we're just looking after ourselves and not concerned with world trade.'" Several commentators, the Journal included, have credited the President for backing off from his campaign anti-trade positions and leaning on the Senate to back off from even more aggressive discriminatory language in their earlier "Stimulus" bill.

But we submit the President still doesn't get it. He referred to, "just looking after ourselves..." What he's saying is that cutting off trade helps "us" and punishes others. He still evidently fails to understand that the ultimate victim when trade is strangled, stopped or prices artificially inflated, are our American consumer/taxpayers. When our businesses can't source the best parts or products at the best, lowest price, it is our citizens who are cheated. And if our businesses are lucky enough to have some countries left to export to after we've angered them with trade restrictions, they will not be as price competitive because they've been forced to use higher priced components to make their products.

The bottom line is this: there are a lot more consumers of nearly any product than there are producers of that product. Those producers need to be turned loose to source the best components at the best price and to be pushed to new innovations by the world's best competition if they are going to survive, improve and prosper. And lest we forget, there is really only one source of the money all industries compete for. That is the consumer/taxpayer who so often gets overlooked in all the machinations of the politicians who "get it' the least.

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Last Updated ( Friday, 06 March 2009 )
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