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DAVID KRUSE

By Staff | May 23, 2014

A Pew Research poll found that 53 percent of Americans want the U.S. to mind its own business internationally.

That compared to 41 percent in 1995 and 20 percent in 1964. What bothers me most about the poll results is that 48 percent of Americans believe globalization is a bad thing versus just 43 percent who think it is a good development.

That attitude to me displays ignorance. To believe that the U.S. can somehow isolate itself from global humanity is absurd. Forty-eight percent versus 46 percent are anti-trade which is really parochially stupid.

Ninety-six percent of global consumers live outside the U.S. and you don’t want to trade with them? Are we that insecure over our ability to compete in the world economy? Trade makes us stronger.

There will be an enormous amount of wealth created outside our borders and we should view that as opportunity instead of with trepidation.

That is where U.S. agriculture is going to get the growth in its markets. The growing isolationist non-interventionist attitude of the American people is a backlash from a decade of war draining our blood and treasury.

It is becoming a threat to ag trade.

President Obama started off on the wrong foot on U.S. trade policy, almost begrudgingly finishing the work that George W. had left him on free trade agreements with South Korea, Colombia and Chile.

He never aggressively pursued fast track trade authority from Congress that is necessary to negotiate trade deals of his own.

Obama doesn’t champion trade. Americans are not sure of globalization and if the President was like his mentor, Nelson Mandela, he would be telling the people what they needed to hear, acting like a real leader.

There has been no strategic management of U.S. trade policy coming from Washington during the venue of the Obama administration.

U.S. trade policy was left on cruise control and it may be almost as hard to find evidence of where it went as it has been to find Malaysian Flight 370.

As the administration slowly advanced negotiation toward trade agreements with the European Union and Asia it became apparent to them they were hamstrung by the lack of trade promotion authority from Congress to negotiate an up or down deal.

They knew that going in, but must not have expected that negotiation would progress to the point where they could get there from here needing the authority.

They have now gone through the motions of asking Congress for fast track, but have been rebuffed by a Pelosi/Reed anti-trade congressional coalition.

I have always had low expectations for an FTA with the EU because of EU’s stance on science for which they substitute their “precautionary principle.”

Europe is in the dark ages on adoption of biotechnology and will never concede to acceptance because they use it as a trade barrier.

They choose to be isolated, which is the antithesis of trade agreements. They will never concede on this issue, so expending resources on a trade agreement with the EU is a waste of time.

They have to bring everything to the table, and they won’t. There is also the issue that the EU thinks that it owns the names of many foods from “Champagne” to “Bologna.”

Asia was entirely different. We were working with what they called the Trans Pacific Partnership with 11 Asian/Pacific Rim nations and were making progress.

Japan was not initially included. My trade strategy would have been to conclude and ratify an FTA with the original group of Asian nations which would have given us great leverage in negotiating an FTA with Japan.

As I noted, I really can’t identify that the U.S. has had an actual trade strategy relative to advancing trade agreements, because the politics here on the issue were so uncertain.

By contrast, Japan has a trade policy and a strategy. Fearing getting left out of a TPP with others in the region, benefiting from improved trade status with the U.S., Japan embarked on a “one way or the other trade strategy.”

They were either going to become part of the TPP or see to it that the TPP was derailed so as not to be put at a competitive disadvantage because of it.

The other part of its trade strategy was to ink FTAs with Australia and Canada so as to put the U.S. at a disadvantage in both trade and leverage. Australia will take a worse tariff deal on beef and Canada on pork from Japan than we would expect to get.

A group of U.S. senators expressed their opinion, saying, “By requesting special treatment for its agricultural sector in the TPP, Japan may upset the careful balance of concessions that the 11 other economies involved in the negotiations have achieved.”

That is right – which is why we should have finished the TPP with those 11 other nations. It would have put us in terms of leverage, where Japan is now.

They would have been forced to make concessions they are currently resisting. If the Obama administration actually has a trade strategy, it is not obvious.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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