Trade Concerns

September 26, 2013

Hello everybody out there in farm country. This radio commentary is brought to you by Monsanto, and John Deere. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you. 

And now for today’s commentary— 

This week, I was on a panel with three other former Secretaries of Agriculture. The event, sponsored by Croplife, was a lot of fun for those of us on the program and also the audience. Not surprising, the farm bill was in the spotlight. “Will we get one – won’t we get one.” And, what the final bill might look like. We did agree that, in the end, we probably will get a bill, and the farm and nutrition provisions will be reunited. I compliment Jay Vroom, CEO of Croplife, for structuring an outstanding ag industry meeting. 

I put on the table an issue that I don’t think has received enough attention. The issue is trade and how the farm bill provisions can affect trade. We export 30% of our farm production. A healthy U.S. agriculture needs the global marketplace. 

We have been in a running battle with Canada since the 2002 farm bill, which requires the labeling of “country of origin” (COOL). That sounds reasonable, but it’s not that simple. An example might be baby pigs that are farrowed in the U.S. – shipped into Canada to be raised to market weight – then shipped back into the U.S. for slaughter and processing. The processing companies would be required to segregate those pigs from the U.S. pigs. The meat would have to be segregated and correctly labeled. That would include every production step (born, raised, slaughtered). The whole process is ridiculous and costly. We have a Free Trade Agreement with Canada and Mexico. Canada and Mexico consider the COOL law to be trade-distorting. They are right. The World Trade Organization has ruled that COOL is unfair to Canada and Mexico.  USDA has tried to rewrite the COOL rule but Canada and Mexico are prepared to retaliate with trade restrictions against our exports. Here we are in the process of negotiating a new trade agreement with Europe and another one with Pacific countries. We don’t want our farm bill to be out of compliance with world trade rules. There is even risk that the counter-cyclical price supports in our new farm bill could be a problem. 

Even today, we are paying Brazil millions of dollars each year to bribe them to not impose tariffs on our exports. Why? Because our Cotton Program does not meet WTO standards. 

Let’s get it right this time. 

Until next week, I am John Block in Washington, D.C.