Port of Seattle
Craig Chandler/University of Nebraska
Fleets of trucks, lines of railcars and bustling ports send U.S. agricultural products to far-flung foreign markets each day.
Last year alone, those exports exceeded $140 billion with a trade surplus of more than $21 billion. They also supported more than 1 million jobs to deliver those products around the world and generated $178.8 billion for the U.S. economy.
But a growing sentiment of protectionism in the U.S. is threatening the future of agricultural exports and the health of rural communities, according to a group that is mobilizing to combat those threats. Farmers for Free Trade is on a mission to rebuild grassroots support for trade.
Launched last summer, Farmers for Free Trade is chaired by former U.S. Sens. Max Baucus, a Montana Democrat, and Richard Lugar, an Indiana Republican. Both are strong proponents of free trade who say they are concerned by the loss of the country’s long-held pro-trade consensus.
“We need to rebuild consensus on agriculture trade. It must be one that incorporates the position of American farmers, that reflects the needs of rural communities, that is echoed by state and local leaders, and that seeks to heal the deep fissures on trade in Washington D.C.,” they said in an opinion column they wrote on behalf of Farmers for Free Trade.
The organization was formed in response to the beating trade deals took on the campaign trail in the 2016 presidential elections, with both Republican and Democratic candidates bashing existing and pending agreements at every turn.
The discussion was focused on the U.S. trade deficit, which was more than $700 billion in goods in 2016.
“It was a field day of people beating up on trade. The farmer’s voice was not being heard,” said Brian Kuehl, executive director of Farmers for Free Trade and director of federal affairs at K-Coe Isom, a national agricultural accounting and consulting firm.
“The real loser was free trade. The voice of reason on the benefits of trade was completely lost in the dialogue,” he said.
“Candidates started questioning decades of assumed consensus that trade and agriculture are very complementary,” said Darci Vetter, former chief U.S. agricultural negotiator, who serves as an adviser to Farmers for Free Trade and is the diplomat in residence at the University of Nebraska.
“Candidates started questioning that and whether the U.S. was winning or losing at trade,” she said.
That question really sank in. Even some farmers, who have long prospered and taken pride in feeding the world, were questioning the balance. And all the rhetoric about losses in manufacturing jobs had them feeling a little sheepish — despite the fact that food processing is the largest manufacturing industry in the U.S., she said.
The anti-trade sentiment fueled by the elections prevailed, with Congress failing to enact the 12-nation Trans-Pacific Partnership — an agreement largely supported by U.S. agriculture — and newly elected President Donald Trump quickly pulling the U.S. out of it.
Trump’s threat to pull out of the free trade agreement with South Korea has not yet materialized. But his threat to pull the U.S. out of the North American Free Trade Agreement between the U.S., Canada and Mexico has resulted in negotiations aimed at revamping the treaty.
The country now has a Republican president who’s turning the U.S. trade agenda on its head, said Vetter, whose tenure was during the Obama administration.
Typically, the Republican Party platform embraces open and free international trade, she said.
“The message we’re hearing now is that the U.S. is looking inward. But are we winning when we renegotiate trade agreements instead of opening new ones?” she said.
During the campaign, Trump, Democrat Hillary Clinton and other presidential candidates took aim at NAFTA and the $74.4 billion U.S. trade deficit with Canada and Mexico. They decried the loss of manufacturing plants, the loss of U.S. jobs and lower wages.
They also opposed TPP because the agreement didn’t address currency manipulation.
Overall, agricultural exports represent 20 percent of U.S. production and 20 percent of U.S. farm income. But the stakes are much higher for some commodities. Exports account for 70 percent of the cotton and tree nuts and 50 percent of the wheat, soybeans and rice grown in the U.S.
Loss of those export markets would cause prices to tumble, harming U.S. agriculture, Kuehl said.
“Unless we reinvest in talking to people about the benefits, we’ll lose out on trade,” he said.
Agriculture has long been a bright spot in the U.S. trade portfolio, posting an annual trade surplus for more than 50 years. Any threat to that trade could have an overall net negative effect on the export economy, he said.
“It’s a perilous time because the United States is now asking itself these questions, whether we will continue to engage or pull back. Without competitive access to markets, we can very easily be left behind,” Vetter said.
Other nations and trading blocs are stepping into the doors that the U.S. has left open. The European Union is negotiating with Japan and Mexico, and China is working on regional agreements, she said.
“We are by no means the only game in town,” she said.
It’s a myth that the U.S. can somehow pull out of trade and still be OK because the U.S. is such a big economy, she said.
“We can’t really pull ourselves out of trade agreements. The trade won’t stop if we don’t engage,” she said, adding that there needs to be a clear message that the U.S. needs open and free trade to be successful.
“We need to have farmers clearly state why trade is important and what they want Congress and the administration to do,” Vetter said.
“By and large, the United States has been successful in being a leader in the global economy and setting the rules of the road,” she said.
If the U.S. is not part of setting the terms of trade agreements, farmers will pay the price because U.S. agriculture is so export-dependent, she said.
Sitting on the sidelines is not an option, Vetter said.
Trade agreements take a long time to negotiate and to go into effect, she said. The negotiations for the TPP took seven years. Meanwhile, the middle class in many countries is growing and demanding better food — products the U.S. excels at producing, such as meats and fresh fruits and vegetables, she said.
Those consumers are establishing buying habits and adopting brands. If U.S. products can’t get into those markets or if they are too expensive because of high tariffs, they would lose ground to competitors. And it would take a long time to overcome those obstacles if the U.S. comes late to the negotiating table, she said.
“Ninety-six percent of the world’s consumers live outside our borders. If we don’t stay competitive and get access to those markets, we’ll fall behind,” Vetter said.
Other countries have built up their agricultural industries and are more competitive than they used to be, she said.
“Being part of these agreements and helping to write the rules is more important than ever,” she said.
Despite all the protectionist rhetoric, Vetter said she is not convinced that support for free trade in general has withered that much, but agriculture has not done a good job of communicating the benefits.
Agriculture is now in the position of playing catch-up in communicating those benefits to the broader public, she said.
Farmers for Free Trade believes the message of how trade benefits farmers and rural communities will prevail, Kuehl said.
Most farmers and ranchers understand the importance of trade, and the objective is to make sure their voices are heard. For others, it’s about education and connecting the dots between their products and exports, he said.
The organization is working to educate and mobilize farmers through events such as grower conventions and social media.
Farmers for Free Trade is not a Washington, D.C.-focused effort, and it’s not a lobbying organization, he said.
“We’re very much focused on the conversation in the heartland. Middle America shapes what happens in D.C.,” Kuehl said.
It’s making sure everyone in a coffee-shop conversation understands the benefits of trade and that farmers know where their products go beyond harvest, he said.
“We believe if you rebuild the national consensus on trade, it’s naturally going to flow uphill to the people in D.C. to support trade. This investment on the ground is critical,” he said.
It’s also about farmers and rural Americans sharing the benefits and support of trade with their local and state officials, who in turn will push that sentiment up the line.
The effort is already seeing that sentiment reflected in statements from elected officials, such as the governors of Arizona and Arkansas, who have issued agricultural trade awareness proclamations.
It’s also gaining momentum in the farm community, garnering support from the American Farm Bureau Federation, National Pork Producers Council, National Association of Wheat Growers, CropLife America and hundreds of independent farmers and ranchers.
“We really feel like we’re building a good head of steam,” Kuehl said.
This grassroots effort is critical, said Julie Anna Potts, American Farm Bureau executive vice president.
Misperceptions have taken hold about trade. It’s been a political lightning rod, and the rhetoric has often not been balanced, she said.
“We have to take this action now to make sure everyone knows the real story of how agriculture relies on export markets,” she said.
Farm income is already 50 percent lower than it was four years ago. If the U.S. loses its foreign markets, farm income will decline even more and that would be disastrous, Potts said.
“Also, if we lose those markets, our competitors in other countries will take full advantage and we’ll never recover,” she said.
“It’s important to get all sectors of agriculture and all of our grassroots voices aligned on this issue,” she said.
Through Farmers for Free Trade, farmers and ranchers can share their stories of why trade matters to them in a way that can be heard at the White House and on Capitol Hill, she said.