FOOD & FUEL FILE
On Feb. 27, the eve the Great Sequester, President Barack Obama left the Oval Office and its byzantine game of federal budget chicken to walk next door to the Eisenhower Executive Office Building to personally thank Ron Kirk “for his service and his friendship over the last four years” to the nation and to the President.
You remember Ron Kirk, right?
The former two-time mayor of Dallas, past Texas secretary of state?
OK, here’s a hint: who is the outgoing U.S. Trade Representative?
Right, that Ron Kirk, the mostly unsung, hardly ever mentioned and still pretty much unknown U.S. Trade Representative from 2009 to 2013.
And that’s just the point. Kirk is the direct opposite of his always talking, always breathless predecessors who made themselves into biz rock stars jetting about to save world markets from anarchists, socialists and – the worst of the worse – protectionists.
Instead, Kirk and his staff avoided television cameras and big trade deals. They just did their jobs which, not coincidentally, also took the wind, rocks and chaos out of the sails, hands and minds of anti-globalization forces here and abroad.
This entirely dull record of bureaucratic competence came as a big shock to Big Biz and Big Agbiz. The Bigs all but predicted a U.S. trade implosion under the Obama Administration if it failed to follow their free trade-big deal dictum.
They didn’t, and it didn’t.
In fact, despite the weakest U.S. economy since the Great Depression and a still weak European economy, U.S. exports have done the exact opposite: they have soared.
From fiscal years 2009 to 2012, total American exports grew by 48 percent, from $943 billion in the first year of the Obama Administration to $1.4 trillion last year.
Across that same period, U.S. ag exports climbed from $96.3 billion in FY2009 to $135.8 billion in FY2012, a jump of 41 percent.
High value segments of the U.S. farm basket performed even better.
For example, if you compare total red meat exports from 2009 through 2012 to those of 2005 through 2008, collective pork exports rose 57 percent (from $13.5 billion to $21.5 billion), while total beef exports leapt 87 percent, from $9.5 billion to $17.8 billion.
Two big reasons for this export explosion (and the predicted continued growth in FY 2013), explains the U.S. Department of Agriculture’s Economic Research Service, are cheap global credit and the weak value of the dollar against other currencies.
Fiscal conservatives are quick to point out that both strategies – borrowed money and devalued dollars – are poor long-term strategies on which to build export sales.
Some economists may agree.
Most up-to-their-eyeballs-in-clover farmers, however, don’t.
Farm and commodity groups have advocated a cheap dollar-easy credit policy for decades because it usually delivers growing exports. The most recent trade data only add to their love affair of cheap greenbacks.
As remarkable as this ag export success has been – the ag trade surplus was just $4.5 billion in FY2005; down from $42.8 billion in FY2011 – even more remarkable is that it has come without the “big trade deal” every ag group absolutely believed was an absolute necessity for any success.
The most recent “big deal” Big Ag supported was the World Trade Organization’s Doha Development Round. These talks, 12 years old and going nowhere, have been stalled since December 2011.
As such, Doha has had no bearing on this ag export spike whatsoever.
Actually, Doha yakkers are going somewhere. All are scheduled to restart negotiations in Bali, Indonesia – the one world class resort destination they somehow overlooked in these career-long, travel-to-talk talks – in December.
Bali in December sounds rough, but Ron Kirk won’t have to suffer. His work is done and he’s headed back to Texas long before then.
Where, no doubt, you’ll forget him again.
The Farm and Food File is published weekly in more than 70 newspapers in North America. Contact Alan Guebert at www.farmandfoodfile.com.
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