Farmers Need Trade, Not Aid


Shortly after becoming prime minister of Israel in 1963, Levi Eshkol learned that a drought was at hand. “Where?” he asked, upset at the news. “In the Negev,” replied his aide. Eshkol was relieved: “For a moment, I thought you meant in Kansas.”

People all around the world rely upon what American farmers grow — and American farmers depend upon them in return. The foreign market for U.S. farm products is expected to be worth $53 billion this year. In fact, agriculture is a part of our economy that actually enjoys a trade surplus with other countries. One out of every three acres planted by our farmers is intended for export.

Yet agriculture also remains the area of the global economy most distorted by trade barriers, and therefore most in need of liberalization. The average tariff around the world for farm products is 62%, compared to just 4% for other goods.

That`s why farmers are so interested in the Senate passing Trade Promotion Authority this month. It would give the president the authority to negotiate international trade deals and submit them to Congress for an up-or-down vote. Last December, the House approved TPA — but by only a single vote. It`s still not clear whether the Senate will approve its version.

Failure to do so would mark a significant defeat for the friends of free trade. They`ve winced at new tariffs on lumber and steel this year — though they`ve also hoped these concessions would represent only minor setbacks compared to the major achievement of approving TPA.

The great economic story of the last half-century has been the huge increase in international commerce, a development made possible, in large part, by the leadership of the United States. As much as farmers have benefited during this period, they haven`t benefited enough. Tariffs on manufactured products have dropped by about 90%, but those on farm goods have barely budged.

Now a measure meant to help farmers threatens to gum up free trade even more. President Bush is already uncapping his pen to sign a $170-billion farm bill that includes heavy subsidies for export crops such as soybeans and wheat. History tells us that increased guaranteed subsidies will lead to increased production and even lower prices, causing a need for even more subsidies in the next few years. Around the world, virtually all our trade partners are viewing this move with enormous and understandable skepticism if not outright hostility.

“At a time when all developed countries have accepted the direction of farm support away from trade- and production-distorting measures, the U.S. is doing an about turn and heading in the opposite direction,” says EU agriculture commissioner Franz Fischler. “We cannot negotiate on the basis of `Do as I say, not as I do.`”

The bill threatens to put the United States in violation of the Uruguay Round of multinational trade talks. It may also keep us from negotiating lower tariffs among countries belonging to the World Trade Organization and establishing a Free Trade Area of the Americas — both major goals of the Bush administration.

Farmers don`t need handouts as much as they need added opportunities to sell more of what they grow. When trade barriers fall, farmers benefit. Since the passage of the North American Free Trade Agreement in 1993, farm exports to Mexico have doubled.

In America`s heartland, more of this would be welcome. A recent agreement between Canada and Chile removes the duties on the wheat and potatoes that Canadian farmers sell in Chile. Farmers in Nebraska and Idaho, however, continue to pay an 8% tariff when they try to sell anything in Chile. This puts them at an obvious disadvantage.

The problem isn`t confined to Canada and Chile, either. There are about 150 free-trade agreements on the books around the globe. The U.S. is party to only three of them — one with Canada and Mexico (Nafta), another with Israel, and a third one with Jordan. The European Union, by contrast, has 31 separate arrangements. Most of these deals were made within the last decade, and another 15 or so are in the pipeline. Mexico — our second biggest trading partner — has struck some 25 trade deals since 1994.

President Bush would like to negotiate more free-trade deals — a power every one of his predecessors going back to Gerald Ford has enjoyed. Yet the executive branch`s authority to do this lapsed eight years ago and hasn`t been renewed. Other countries simply won`t enter serious negotiations as long as 535 members of Congress can pick apart the results.

America`s farmers grow more food than anybody else in the world, but politics denies them the chance to bring their whole harvest to the global marketplace. It`s no wonder federal subsidies can appear attractive in this environment.

What farmers really deserve, however, is a level playing field — which can only be obtained through fair-minded international trade negotiations, of the kind that TPA would make possible.

Mr. Kleckner, chairman of Truth About Trade and Technology, is the former president of the National Farm Bureau Federation. He operates a 350-acre corn, soybean and hog farm near Rudd, Iowa.

Dean Kleckner

Dean Kleckner

Deceased (1932-2015)

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