International trade is a key issue facing Iowa farmers today. Concerns about the future of trade and finding ways to grow exports have been heightened by low commodity prices and growing surpluses, as well as a growing number of anti-trade voices in the United States and around the world.
As part of our periodic conversations with Craig Hill, the Spokesman visited with the Iowa Farm Bureau Federation president about the importance of trade to Iowa agriculture, the current trade climate and the longer-term outlook for agricultural exports.
Q: Trade is on the mind of Iowa farmers these days with commodity prices low and surpluses. Why is trade such a concern for Iowa farmers?
Trade is essential to Iowa farmers and our entire state. That makes sense, when you consider that we are the second leading agricultural state in the country and the second most dependent on trade. We have been adding value here in Iowa by converting grain to protein and other products. But we also need to take into consideration the opportunities of supplying the 95 percent of the global population that is outside of our borders. So growth in trade and that opportunity to reach that global market is essential and critical to the economic vitality of this state.
Q: What is your take on the overall trade climate as we head into planting season?
Well, I think the rhetoric during the 2016 campaign did a disservice to trade in general. We lost perspective of the value of trade. Then post-campaign, some of the rhetoric and the tough talk has probably blemished the traditional reputation that America has had in living up to its agreements.
We have not defied any of our agreements, we’ve not placed any new tariffs or taxes on imported goods. But the threat of that has forced, I believe, other countries and other consumers to look for other sources.
I can’t put a dollar value on that, but the reputational loss as our reliability as a supplier has been tarnished some.
But there has been improvement recently, though. There was the meeting of President Donald Trump and Xi Jinping, the president of China, which was very constructive. The ripple effects from that meeting left with a good feeling about the relationship with China and some of the concerns that we’ve had in the United States. An example is the beef import situation with China. Maybe there is finally some light at the end of the tunnel in opening up the beef market with China.
Q: With all the talk on trade, do you worry that agriculture could get caught in a skirmish over manufacturing, or something that ag doesn’t have anything to do with?
That is a big concern, and I do worry a great deal about that. There are issues around manufacturing and losing those jobs here in the United States. But if you lose jobs in production agriculture or in ag processing, you haven’t made any gains. So if there is going to be more dialogue and measured attempts to improve trade, we hope that it’s done with the idea that agriculture has been a bright spot, really a shining star in the U.S. trade portfolio.
Q: With the United States pulling out of Trans-Pacific Partnership and NAFTA under scrutiny, do we need to concentrate on bilateral trade deals to open markets for American farmers?
There is an immediate need for bilateral trade agreements, especially in the Pacific Rim. The region has 3.2 billion people and a growing middle class. Also, we have growing competition. China is working hard to reach its own trading program, and we are allowing them to take over.
Bilateral agreements, if we can’t get multi-lateral agreements signed, may be in order. I think we need to initiate first with Japan; that is the going to be the foremost opportunity and is Iowa’s second best trading partner today.
I look forward to an agreement with Japan, which could set the stage for others in the region. Keep in mind, the 14 free trade agreements we currently have with a total of 20 countries constitute 50 percent of our agricultural trade. That shows agreements work.