U.S. Agricultural Exports Lag under Past Trade Deals
September 13, 2016
Proponents of the Trans-Pacific Partnership – or TPP – have spent decades promising U.S. farmers and ranchers that free trade agreements are good for agriculture. Time and again, these promises have been broken. Since becoming the researcher at Public Citizen’s Global Trade Watch, I have been digging through the agriculture trade data. The case is quote compelling: our past trade agreements have had a negative impact on U.S. agriculture. That is worth considering, because the TPP would double down on the past model.
Since 2008, U.S. food exports to free-trade partners have lagged behind U.S. food exports to the rest of the world. In fact, the volume of U.S. food exports to non-FTA countries rebounded quickly after the 2009 drop in global trade following the financial crisis. But U.S. food exports to FTA partners remained below the 2008 level until 2014. Even then, U.S. food exports to FTA partners were just 1 percent higher than in 2008, while U.S. food exports to the rest of the world stood 4 percent above the 2008 level.
Now let’s consider what to make of the recycled promises that the TPP will be a boon for U.S. farmers. The TPP itself was modeled on the U.S.-Korea free trade agreement that entered into force in April 2012. Before its passage, U.S. Agriculture Secretary Tom Vilsack declared: “we believe a ratified U.S. Free Trade Agreement [with Korea] will expand agricultural exports by what we believe to be $1.8 billion.”
In reality, exports to Korea of all U.S. agricultural products fell $1.4 billion, or 19 percent, from the year before the FTA took effect to its recently-completed fourth year of implementation. During that same period, total U.S. agricultural exports to the world only declined by 9 percent.
And there are many products that have experienced declining exports since the U.S. – Korea FTA.
- Apples:S. apple exports to Korea have fallen 8 percent in the first four years of the Korea FTA.
- Corn:S. corn exports to Korea have plummeted 57 percent during the Korea FTA’s first four years – a loss of more than 3.6 million metric tons of corn exports each year.
- Poultry: S. poultry exports to Korea have dropped 35 percent during the first four years of the Korea FTA – a loss of more than 25,300 metric tons of poultry exports each year.
- Wine: While FTA proponents have claimed wine as a winner under the Korea FTA, U.S. exports to Korea of wine have declined 6 percent under the Korea FTA’s first four years – a loss of nearly 239 metric kiloliters of wine exports each year.
Those hardest hit by rising agricultural imports and declining trade balances are the smaller-scale U.S. family farms. Since 1993, the year before NAFTA took effect, one out of every ten small U.S. farms has disappeared. By 2015, nearly 198,000 small U.S. farms had been lost.
In addition to this report, the Department of Agriculture’s conducted its own study and found that the TPP would increase U.S. growth by 0.00 percent if all tariffs on all products were eliminated, which did not occur. The U.S. International Trade Commission’s study found that nearly half of all U.S. agricultural sectors would experience worsening trade deficits under the TPP. And this study was conducted under many false assumptions, including the assumption that countries won’t manipulate their currency to gain a competitive edge in exports.
Government data undermine the claim that farmers and ranchers benefit under free trade agreements. To read more of our findings on what trade agreements have meant for U.S. agriculture, please click here.
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Posted by: Boby | October 26, 2016 at 04:22 PM