Reaping the Benefits of Trade


I don’t know much about cast-iron backs, but I do know something about gardening–and the idea of having a cast-iron back to go with it sounds awfully appealing.

When I was a kid, we used to garden a lot on our farm. It wasn’t a weekend hobby. It was done to put food on the table.

Today, we put a lot more food “on the table”, but we don’t do as much serious gardening. This paradox is made possible by trade–a very personal version of the issue Congress is deliberating right now. The Senate approved the Central American Free Trade Agreement (CAFTA) last week, and the full House of Representatives is expected to vote soon.

CAFTA is good for the United States because free trade is good for everyone. I’m reminded of that fact every time I think about my family’s old garden.

Working in it was back-breaking labor. We all understood why we did it, so we didn’t complain. But neither was there any grumbling when we were able to abandon the garden and buy more of our food at the grocery store.

What happened was that we altered the economic equation. Our family’s economy, once based on a standard of at least partial self-sufficiency, became more integrated with the wider world. We worked less on gardening and more on farming. We traded the bounty of our harvest for everything else we needed–including some of the food we once grew in our garden.

We’re less self-sufficient today, but we’re also more prosperous.

CAFTA operates on the same principle. By removing artificial barriers to trade, we promote the economic integration that helps Americans everywhere–from its biggest cities to its smallest farming communities–save money on consumer items and sell more of their own products abroad.

CAFTA isn’t the biggest trade deal the world has ever seen. The CAFTA nations are small–their populations are comparable to individual states. Costa Rica, for example, is home to about 4 million people, making it a little bit bigger than Iowa.

I believe rejecting this chance to increase our trade with the CAFTA countries would be a big mistake. The same logic would have individual states erecting trade barriers with their neighbors. Should we in Illinois stop trading with Iowa because the cost of labor in Iowa is slightly cheaper? Of course not–that’s absurd.

There may be a big difference between Hawkeyes and Guatemalans, but there’s no doubt that people in Illinois benefit when we trade with people who live elsewhere.

CAFTA will deliver a positive benefit, especially for Illinois farmers. Our state is the nation’s second largest exporter of soybeans–but in the CAFTA countries, our soybeans face tariffs as high as 20 percent. Under CAFTA, these barriers will fall immediately.

A similar analysis is possible with our other commodities. We’re the #2 exporter of feed grains, but our feed grains face tariffs of up to 35 percent in the CAFTA countries. Hog production is our state’s third leading source of farm cash receipts, but our pork confronts tariffs as high as 47 percent.

If these obstacles don’t come down, Illinois farmers will lose cash. According to an American Farm Bureau Federation report, Illinois’ exports to the CAFTA nations in 2024 will be nearly $55 million less if we don’t have a free-trade deal with them. Meat and soybean producers will suffer the worst shortfalls.

Granted, $55 million may not be a make-or-break figure in the scheme of my state’s economic future. But, if our attitude is to turn down attractive opportunities, everybody may need to consider going back to gardening.

And that means we may need to import some cast-iron backs. Unless they’re made in Iowa.

John Reifsteck, a corn and soybean farmer in western Champaign County Illinois, is a Board Member of Truth About Trade and Technology.

John Reifsteck

John Reifsteck

John Reifsteck operates a corn and soybean farm in western Champaign County, Illinois. He served on the Global Farmer Network Board of Directors, and is a former Chair. John currently serves as Chairman and President of the GROWMARK Board of Directors-a farm supply and marketing cooperative that operates principally in Illinois, Iowa, Wisconsin and Ontario.

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