Monday, January 28, 2008

Global Trade--Good or Bad?

Several of the candidates for president have made opposition to global trade a key plank of their campaigns. Strangely, I’ve yet to see one who has aggressively embraced trade, although several have made positive comments about it when asked.

The luncheon speaker at the SARL Conference was Ambassador Clayton Yeutter, past Secretary of Agriculture (1989-1991) and U. S. trade Representative (1985-1989). He served in the cabinet and sub-cabinet for four U. S. Presidents, was CEO of the Chicago Mercantile Exchange and has been involved in numerous agricultural and business organizations. His roots to agriculture are deep tracing back to his childhood days in Eustis, NE (population 464) in far western NE.

One of the topics that Yeutter spoke on at the conference was trade and how the national media seems to have a field day with attacking free trade, “We get our national interests all messed up every four years and it takes a year to get back on track with the negativity in the presidential campaigns. This despite the track record over the past 60 years on global trade having been superb. The U. S. has been the biggest beneficiary of the growth in world trade from only $58 billion in 1947 to over $10.4 trillion today.”

Ambassador Yeutter pointed out that the U. S. is the largest exporter in the world, capturing over 10% of world exports. We export more than half of Germany’s entire GDP and more than all of the GDP of India with their two million people.

He pointed out the differences between the U. S. and major trading partners like Japan and Western Europe, “Those countries have created a total of 1.5 million jobs since 2000 with trade surpluses, while we’ve created 9.3 million net new jobs during that same time but with trade deficits. During that time we’ve lost 3 million jobs in manufacturing but 90% of those were lost to technological innovation that had nothing to do with international trade.”

As to NAFTA his comments were, “it has been a spectacular success. We have increased our trade between the three countries by three times. Over 55% of our ag exports go to Canada and Mexico. Since passing NAFTA the unemployment rates in all three countries have gone down.”

Ambassador Yeutter also talked about the new farm bill, trade negotiations and subsidies, energy and the future of agriculture in the USA. His conclusion was that our best days lie in the future, 2008 is going to be much better than the records in 2007, but that the future is not risk free, “There will be a supply response from all over the world to the high commodity prices of today.”

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