What is in this article?:
- Time to pull US back from export cliff
- Troubling data
- Farm exports have been a bright spot. USDA recently predicted that they would reach $145 billion this year, which is more than $9 billion above last year’s total. But, looks can be deceiving. In October, U.S. exports plummeted, not just in agriculture but across every major category of trade.
To complicate matters, we’re measuring in dollars rather than by volume. Dollars are a good way to evaluate exports, but not the best way. Currency valuations can mask the true story. For a better sense of our export health, we have to examine export volume.
And here, the data are more troubling. The total volume of farm exports will be about 108 million metric tons this year. This is well below recent levels. The drought explains some of this but not all of it. Even with corn exports falling by almost half, we’re still shipping out fewer major commodities. We certainly aren’t on track to double anything.
One of the best ways to improve export volume is through policy: rules at home that allow farmers and businesses to thrive, and trade agreements with partners that allow goods and services to move free from artificial barriers. Success requires sensible regulations that protect consumers rather than onerous ones that hobble economic activity, plus an aggressive agenda of trade diplomacy.
These are long-term strategies. Adopting them now won’t save us from the oncoming fiscal cliff—it’s too late for that—but it will help our economy in the future.
A central dispute between the White House and Congress in their fiscal-cliff standoff involves spending. President Obama would like a new round of stimulus spending, even though it would add to the federal debt.
Properly understood, exports can serve the same purpose—but without the debt. Rather than creating programs and sending the bill to taxpayers, officials should push for new trade agreements that allow Americans to export goods and services abroad. They approved deals last year with Colombia, Panama, and South Korea, but only after letting them languish for years. So far, the Obama administration has talked about expanding trade opportunities but it has not negotiated a single trade pact on its own.
More trade will create jobs and economic growth at no cost to the public treasury—especially if we strive to boost not just our sales value but also our sales volume.
Bill Horan grows corn, soybeans and other grains with his brother on a family farm based in North Central Iowa. Bill volunteers as a board member and serves as Chairman for Truth About Trade & Technology (www.truthabouttrade.org).