News
Guest opinion: Global market is road to Montana’s ag future
Montana’s farmers and ranchers are at the heart of a national debate that will not only set the future course for the agricultural community of the United States, but will also influence this country’s foreign trade policy for at least the next decade.
By ALLEN F. JOHNSON
U.S. agricultural trade negotiator
There are two possible visions of the future: one looks inward and is stagnant; the other looks outward and is dynamic.
The inward vision is basically economic isolationism where we limit our engagement with the world. It focuses only on supplying our domestic market, where the growth of both population and consumption are relatively flat. But American agriculture has become so efficient that the domestic market is not enough. We are expanding our production of food much faster than our domestic population and consumption are growing. To limit our ambitions to the domestic market is to endanger the growth prospects not only for this generation of our country’s farmers and ranchers but also for the generations to follow.
We must recognize that a growing global economy creates new opportunities to access new customers and rapidly growing markets overseas. Ninety-six percent of the world’s consumers live in other countries. Their population and their food consumption continue to grow much faster than that of the United States, along with their demand for the high-value products in which the United States has a comparative advantage.
Selling wheat abroad
In 2002, Montana producers sold $268 million in agricultural products overseas. This is more than the total annual cash receipts combined for all barley, sugar beets, dairy products, potatoes, hogs, and sheep produced in Montana. Nearly $200 million of the exports came from Montana’s 8,000 wheat growers, who brought in more cash receipts from overseas than from domestic sales.
We are advancing U.S. interests in the World Trade Organization by working to eliminate export subsidies, where the European Union is allowed to spend $2 billion in export subsidies on wheat and beef alone. We’re working to reduce and further harmonize trade-distorting domestic support – the EU can provide roughly $70 billion in trade-distorting domestic support – and substantially increase market access to the world where the allowed WTO tariffs are 72 percent for wheat and 85 percent for beef. We are targeting a long list of trade-distorting policies that have frustrated U.S. producers, such as the monopoly export rights held by the Canadian Wheat Board and the Australian Wheat Board.
Free trade agreements
Realizing the need to expand markets around the world, we have finalized free trade agreements with 11 countries in two years. New and pending FTA partners, taken together, would constitute America’s third largest export market and the sixth largest economy in the world.
These new FTAs have expanded opportunities for Montana’s farmers and ranchers by opening up new markets for beef, wheat, potatoes, pork and other products. The American Farm Bureau analyzed the Dominican Republic FTA and the Central America FTA and found that agricultural exports would increase by $1.5 billion.
At the same time, our trade agreements are sensitive to concerns of domestic producers. Our agreement with Australia, for example, maintains significant limits on beef imports through quantitative restrictions and safeguards. Additional beef imports from Australia will amount to less than 1 percent of U.S. production over the next 18 years. The vast majority of these imports do not directly compete with the United States’ high-quality beef products and, in fact, are complementary in products such as hamburgers.
Montana’s rangelands have sustained ranchers and farmers for more than 150 years. To extend this rich tradition of stewardship, we must continue to embrace the outward vision to ensure we are growing and leading on the road to the future, rather than being left behind as our competitors and customers move on without us. By developing export markets and continuing our long standing agricultural heritage, Montana’s ranchers and farmers can look beyond the borders of the Big Sky Country to the rest of the world so that other countries can share in the high-quality bounty we have to offer.
Ambassador Allen F. Johnson is the chief agriculture negotiator for the Office of the United States Trade Representative, Executive Office of the President. He will speak Thursday to the Montana Stockgrowers Association in Lewistown.
Copyright © The Billings Gazette, a division of Lee Enterprises.
MATR Supporters (view all)
Sorry, we couldn't find any posts. Please try a different search.