Promoting Free and Fair Trade

June 1, 2017

The importance of international trade to agriculture cannot be overstated. The Ag Exports Count coalition notes that U.S. ag exports alone generate $340 billion for the U.S. economy and support 1.1. million U.S. jobs.

Keeping U.S. farm products flowing abroad and related jobs rooted here at home means working hard to strike deals that open new markets. It also means holding trading partners accountable and enforcing trade laws when our competitors try to skirt the rules or cheat the system – something that is becoming more commonplace.

As the chairman of the House Agriculture Committee, Rep. K. Michael Conaway (R-TX), stated in 2016 during a series of hearings held to highlight the rise of foreign subsidization:

“While we were busy writing the 2014 farm bill, which achieved significant reforms and savings, our biggest foreign competitors were increasing to new heights their already high subsidies, tariffs, and other trade barriers. This harms our farmers and ranchers, it harms our economy, and it costs America jobs. That’s why the U.S. government must hold our trading partners accountable when they violate their trade commitments. We cannot allow foreign government subsidies, tariffs, and other barriers to free trade to continue at the expense of America’s farmers and ranchers.”

This position was reinforced by House Agriculture Committee Ranking Member Collin Peterson (D-MN), who said:

“America’s farmers are ready and able to compete in a global marketplace but can’t do so without a level playing field. The United States has a responsibility to hold other countries accountable when they fail to honor their WTO commitments, resulting in lost opportunities for American farmers.”

And that’s exactly what the United States did last year when the Obama administration filed a case with the World Trade Organization (WTO) against China for manipulating markets and subsidizing beyond agreed-to levels – actions that harmed U.S. rice, wheat, and corn producers.

Of course, China isn’t alone, and this is not an issue isolated to the previous administration. The Trump administration is currently sending a strong signal to Mexico for breaking U.S. trade laws and dumping subsidized sugar on the U.S. market to injure American producers.

In 2013 and 2014 the Mexican sugar industry – much of which was owned and operated by the government at the time – began flooding the U.S. market, costing U.S. sugar producers an estimated $2 billion. It also cost American taxpayers $259 million, after the USDA took action to keep the U.S. sweetener market from collapsing from the subsidized sugar surge.

As a result, the U.S. government found Mexico guilty of violating U.S. antidumping and countervailing duty laws in 2015, and Mexico agreed to clean up its act. But it hasn’t. And since 2015, Mexico’s continued unfair trade acts have cost U.S. producers another $2 billion.

Earlier this month, the U.S. Department of Commerce said enough is enough, and it gave Mexico until June 5 to come into compliance with U.S. laws. Reps. Conaway and Peterson are backing Commerce’s play, telling other lawmakers in a recent letter:

“We are eager to prevent more American sugar jobs from moving to Mexico because of Mexican subsidies. We are encouraged that the Administration has committed to imposing anti-subsidy and anti-dumping duties, in accordance with U.S. trade laws, on Mexican sugar in early June if Mexico does not negotiate seriously to end its dumping and injury to American sugar farmers. We ask that you be supportive of the Administration’s efforts to end Mexican dumping and to help keep American sugar jobs – 142,000 in 22 states – in the USA.”

It’s still unclear how things will turn out in the ongoing situation with Mexico’s subsidized sugar industry, or with China’s trade abuses against corn, rice, and wheat. But one thing is for certain: U.S. agriculture wins when it trades, and trade only works if everyone plays by the rules.