Fair Trade, You Say? Government Facts Tell a Different Story
BY Farm Policy Facts
via KTIC (NE) - November 30, 2018
The global unfair trade practices that hurt American farmers and ranchers every day arenít exactly state secrets, despite claims by opponents of agriculture who blindly argue that they donít really exist or matter.
Every year, the U.S. government publishes a lengthy list of worldwide trade cheating called the National Trade Estimate. And, if anyone out there in the policy world still thinks U.S. agriculture isnít being cheated, we welcome you to take a look.
But, just in case you donít have time to read the 504-page report, we pulled a few nuggets to show you just how hard it is out there for American farmers and ranchers. And this doesnít even include all the subsidies and unfair trade practices in India, Thailand, Brazil, and a whole host of other ag competitors.
From the intellectual property theft to massive stockpiles of steel and aluminum, Chinaís trade relationship with the U.S. is strained in many ways.
When it comes to agriculture, China is our largest export market. But Americaís total trade deficit with China is significant at $375.2 billion in 2017. As the USTR notes in its report, Chinaís inconsistent enforcement of regulations and selective intervention create an unpredictable market.
∑ Chinaís 2015 Food Safety Law has been disastrous for exports of dairy, infant formula, seafood, grains and oilseeds. When the international community opposed it, China agreed to an implementation delay but still moved to require an unnecessary official certification of all food products, even low-risk exports.
∑ Beef, to some extent, is back on the table in China after years of an outright ban based on unscientific political whims. But China still doesnít follow international standards on beef and maintains a ban on compounds that are widely used in the industry.
∑ Subsides continue to distort the export market and price for many commodities in China. The government provides subsidies and support for cotton, rice, wheat and corn among others. And, China doesnít follow the market access it promised when it entered the WTO through its tariff-rate quota system.
Our northern neighbor may be the largest good export market we have but the total trade imbalance for all U.S. goods is significant coming in last year at a whopping $17.5 billion.
The NAFTA reboot, known as the United States-Mexico-Canada Agreement or USMCA, aims to correct some of the imbalance but a look at the issues in agriculture shows just how significant the problem is for American farmers and ranchers.
∑ Canadaís supply management system for diary, chicken, turkey and eggs severely limits the ability of U.S. producers to increase exports and means Canadian consumers pay more for these goods.
∑ Dairy alone has been a huge problem for U.S. producers with an unfair pricing scheme called Class 7 that is aimed at decreasing U.S. imports of dairy components and increasing Canadian exports of skim milk powder.
∑ U.S. grain producers also face a big challenge in Canada with a system that prevents them from receiving a premium grade for grain and instead only receiving a label for the country of origin, which unfairly tilts the market toward domestic producers.