It was a beautiful Monday on the farm in Red Bud, Ill., where Kirk Liefer was putting in a new grain bin and waiting for the harvest. The corn crop looks “pretty good,” the fourth-generation farmer reports.
What else is on Liefer’s mind as the corn grows? Trade with Japan — believe it or not.
Liefer leads a quintessential American life, benefiting from what he calls one of God’s greatest gifts: the land. Yet, nearly his entire corn harvest and 80 percent of his soybeans will go down the Mississippi by barge and on to Japan. That makes Liefer’s family farm more export-dependent than Caterpillar Inc.
A regional trade deal between the United States and 11 Pacific Rim nations, including Japan, Mexico and Malaysia, but not China, would give a big boost to Midwestern agriculture. Or, if you prefer to think like a worry-prone farmer: The failure of Congress to ratify the deal, known as TPP — the Trans-Pacific Partnership — would leave farmers and other exporters vulnerable because trade’s a competitive game and market share is always in flux.
“If TPP happens, we have all these partners we collaborate with and hopefully trade grows,” Liefer says. “If for some reason all the parties get together and the U.S. doesn’t, what says they don’t go somewhere else?”
Exactly. This deal is about boosting and protecting exports. The Illinois Farm Bureau says the state already sends $1.4 billion of soybeans annually to the 11 TPP countries, plus $1 billion of corn and other feed and $1.5 billion of pork, dairy, beef and other products. If the trade agreement is approved by the U.S., the Illinois Farm Bureau says state ag exports would increase by $127 million, not to mention broader benefits to the state. That translates into $9,000 more a year for the average family grain farm.
But if the United States decides to sit out TPP? The country faces the prospect of losing out to other ag exporters.
The agreement would knock down tariffs and quotas, eliminate burdensome red tape and set rules for a variety of issues such as intellectual property for a group of countries that makes up 40 percent of the global economy. The 11 other TPP countries are Japan, Canada, Australia, Mexico, Malaysia, Singapore, Chile, Peru, New Zealand, Vietnam and Brunei.
One specific opportunity for the U.S. is increased beef and pork exports to Japan, which long has tried to keep a lid on American meat imports. If those barriers are erased, Japan will take in more American beef and pork, which also would trigger increased demand for corn and soybean feed for those animals.
These same dynamics are at play in many categories of U.S. exports, ranging from machinery and auto parts to flour.
President Barack Obama plans to push hard for TPP this fall. Unfortunately, he’s got an uphill battle. Trade has gotten a dirty name this election cycle, blamed for gutting American factories when the fact is nearly every American manufacturing job that disappears is a victim of productivity gains, not foreign competition.
The reality is trade is a healthy form of competition. American companies make great products and should be allowed to sell to the broadest market.
Congress: Pass this bill. The political furor amounts to a populist boondoggle. Opponents of TPP act as if America is only now debating whether to open the doors to doing business with other countries. Kirk Liefer and a lot of other people will tell you differently. Global trade is the reality, and should be promoted.
— Chicago Tribune
