AFF Sentinel Vol.7#14

Editor's Note: We mentioned the last issue that we had a Facebook page started. If you want to view the Wall, where some topics are up for discussion, the link is at the end of this column.

Very soon, we'll also be starting two blogs. We gather lots of information every day about the issues and how they affect the meat industry. One will be aimed at industry people and keep you up-to-date on political/economic issues, more often and in smaller bites than this column. The other will be aimed at meat eaters, i.e. consumers, explaining why many of these same issues affect them. We'll keep you posted, so to speak.

While everyone debates how anemic the recovery is or whether another shoe's to drop, the administration continues to ignore tools readymade to generate economic activity and jobs.

But world events are gaining agriculture some new allies against the usual opponents in the fight to expand trade. Investor's Business Daily recently pointed out that several members of President Obama's cabinet, as well as a Senate committee chairman, have recently called for the president to move the three free trade pacts standing by to kick start jobs, revenue and solidify relationships ("Yes Free Trade Has Its Deadlines," 05/17/10).

The editorial called the movement to get the pacts with Colombia, Panama and South Korea signed a "revolt of sorts" against Obama's 16-month deference to Big Labor's wishes to kill them. Secretary of State Clinton made an "impassioned plea" at an international meeting for Colombia to just hang on a little longer, that the administration actually wants free trade deals!?!

Senate Foreign Relations Committee Chairman John Kerry made an "unexpectedly forceful plea to Obama," along with ranking member Sen. Richard Lugar, to use the South Korean trade pact to seal U.S. ties with that country during the current great turmoil with North Korea.

U.S. Trade Representative Ron Kirk asked Democrats to pass all three pacts to help the U.S. economy, IBD added. Defense Secretary Robert Gates had already pushed for them, citing national security imperatives.

So what's been happening while Obama proclaims himself a free trade advocate and stonewalls trade agreements -- starting with his administration's doubletalk to Canada over mCOOL a few weeks into his term?

Both exports and imports are growing slowly but the value of imports is significantly higher than exports. The latest data showed U.S. exports rose 3.2 percent in March, worth $147.9 billion, while imports rose 3.1 percent to $188.3 billion. That was a value deficit of $40.4 billion, 2.5 percent bigger than in February ("Global Recovery Fuels Trade Gap," Wall Street Journal, 05/13/10).

But that story, citing a recovering global economy, demonstrates opportunities must be seized quickly, not ignored for years. The growing demand propelling trade volume growth in March data is expected to cool the next few months, reflecting concern over Europe's fiscal problems. The administration went into trade talks with China May 24, with China in an unsurprisingly standoffish mood.

Japan has changed governments, prime ministers and agriculture ministers several times while the Obama administration seemingly made no progress in expanding beef trade with that important customer. Japan changed prime ministers again recently, with indications that maybe this PM is more open to bettering the U.S. relationship. Now may be the time to get Japan on international BSE trading standards, instead of its nonconforming 20-month rule.

The Wall Street story noted that U.S. trade deficits have widened with Mexico, Japan, China and the EU. Guess what countries are current or former number one trading partners with U.S. beef producers? Correct: Mexico and Japan.

Another story noted that "Global trade has so far avoided a serious outbreak in protectionism ..." Maybe they were being too kind. The same story notes "buy American" provisions are still alive in Congress, according to Jeffery Schott of the Peterson Institute for International Economics ("Global Trade Tensions Growing, But Protectionism Curbed So Far," Investor's Business Daily, 05/24/10). The other country named as having a protectionist policy - "indigenous innovation" -- favoring domestic goods in government procurement? China.

We thought China was supposed to get free trade lessons from us, not bad examples.

Meanwhile, the world is passing us by. IBD notes in its free trade editorial that fully 100 broader trade-opening pacts are on the table currently worldwide and the U.S. is involved with - drum roll - ONE of them. In recent years, Chile has signed 57 free trade agreements and Mexico 52, significantly improving their economies.

As for our would-be partners, Colombia has signed or will soon sign agreements with the EU and Canada. We need to sign with Columbia before their August elections or that window likely closes, IBD said. Panama has signed or is close to agreements with Canada, the EU and Colombia. South Korea is expected to finalize deals soon with the EU, China, India and Colombia.

The existing free trade pacts have created 5.4 million jobs (U.S. Chamber of Commerce). Some 17 million American jobs depend on the 14 countries we have existing agreements with. This trade adds $1 trillion to the economy.

So the deliberate obstruction by Obama and Congressional leadership loses markets, revenue and job for Americans. Lose/lose.

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