Export growth has been fueled by trade agreements that provide favorable environments for all parties. According to the National Pork Producers Council, U.S. exports of pork and pork products have increased by 1,550% in value and almost 1,300% in volume since 1989, when the U.S. implemented its first free trade pact.
The U.S. pork industry has exported nearly 27% of its production to date this year. Imagine what prices would be now if the industry had been forced to find a home for that product within U.S. borders – it’s not a pretty picture. The government should be building new trade agreements rather than jeopardizing the ones it already has.
Bill Even, CEO of the National Pork Board, told us earlier this year that pork exports need to continue to grow. Although domestic demand has remained steady, we’re producing more pork than ever before, and that means export markets are vital.
“We’re part of an inter-connected global system, whether you like it or not,” Even says. “That’s been coming since after WWII and it’s a reality.”
He adds that agriculture is a “poker chip that gets played pretty quickly in trade wars or retaliation,” because agriculture has a positive balance of trade in the U.S. and U.S. pork has contributed to that positive trade balance. But the consequences of an export market disruption, either through the failure of an existing trade agreement or from a foreign animal disease outbreak would have a devastating impact on the industry.
There’s no question trade agreements need to be updated from time to time. However, there’s a way of going about it that doesn’t alienate the respective parties. Threatening to withdraw from long-standing agreements puts relationships in jeopardy and compromises trust – a scenario the pork industry can’t withstand.
For example, Dermot Hayes, Iowa State University economist, says if the U.S.-South Korea trade agreement (KORUS) were terminated, live hog prices would fall by 3.8%, or $4.71 per animal.
NPPC and the people representing the U.S. at the negotiation table are working on the industry’s behalf. They understand the importance of trade to agriculture in this country and how devastating any interruption would be to its long-term profitability.
Gregg Doud, nominee to serve as chief agricultural negotiator for the U.S. Trade Representative, recently emphasized the critical importance of NAFTA, KORUS and other free trade agreements for U.S. agriculture. And Terry Branstad, former Iowa governor and trade ambassador to China, has shown that he can help open doors for U.S. pork products in that large market.
These folks understand the incredible value of trade to agriculture.
“It's hard to overstate the importance of NAFTA,” Doud says. The U.S. will “not go backwards” on export opportunities for the agriculture industry, he adds.
Let’s hope the administration and members of Congress allow him to keep that promise.
Tell us what you think about trade in the comments section below.