By John Harrington
DTN Livestock Analyst
When President Donald Trump aggressively launched his first full week on the job by withdrawing the country from the Trans-Pacific Partnership (TPP), a host of agricultural organizations -- most of who had explicitly or implicitly embraced the crusade to "Make America Great Again" -- almost fell over each other in defiance.
For example, a spokesman for the NCBA was quick to note that the "TPP and NAFTA have long been convenient political punching bags, but the reality is that foreign trade has been one of the greatest success stories in the long history of the U.S. beef industry. We're especially concerned that the Administration is taking these actions without any meaningful alternatives in place that would compensate for the tremendous loss that cattle producers will face without TPP or NAFTA."
Similarly, the president of the Illinois Farm Bureau reminded the new occupants of the White House that "46% of Illinois exports go to Trans-Pacific countries and that the TPP was expected to increase Illinois' cash receipts and net exports by $281.1 million and $127.4 million per year respectively. Illinois farmers might have added more than 960 jobs to the Illinois economy. Trump's executive order to withdraw the United States from the TPP is another setback to an already struggling economy."
And president of the American Farm Bureau Federation did not hesitate to lecture the green executive branch on the significance of trade history: "American agriculture is virtually always a winner when trade agreements remove barriers to U.S. crop and livestock exports because we impose very few compared to other nations. We have much to gain through strong trade agreements. We need the administration's commitment to ensuring we do not lose the ground gained, whether in the Asia-Pacific, North America, Europe or other parts of the world."
Other sectors of agriculture that are well-documented supporters of TPP (e.g., NPPC, NCC) have somehow managed to avoid any official statements of concern -- at least so far. But you don't have to be under the evil spell of a fake news story to imagine plenty of anxious grumbling within their rank and file.
Yet if all of these voices have a right to express real concern at the sinking of TPP, none are justified in feigning shock. Right or wrong, President Trump has done exactly what he promised to do through his unique campaign. In fact, the scrapping of TPP was about the only specific issue that Trump, Clinton, and even Sanders agreed upon.
For the record, I was personally troubled by the trade-basking rhetoric of candidate Trump, and I'm even more anxious now that President Trump is officially waxing along the same lines within the powerful confines of the Oval Office. Still, any politician who actually does what he promised on the hustings (frankly, a bit of a rare bird in that regard) deserves a certain amount of respect.
Critics of our new president may be justified in throwing spitballs for a variety of reasons, but hypocrisy is probably not one of them.
At least in the earliest dawn of his administration, Donald Trump is doing yeoman-like work in translating old tweets into new executive orders.
That's not the problem per se.
But beyond his specific objections to TPP and NAFTA (even many ag insiders have long compiled a list of correctives), there are disturbing suggestions that President Trump may not fully appreciate the critical connection between foreign trade and the health of U.S. agriculture. His rather cavalier speech, junking proven export strategies with virtually no meaningful hint of a replacement game plan, makes me worry that he doesn't understand the basic business model safeguarding American farmers and ranchers essentially since the birth of the Republic.
Let's hope I'm wrong, that I'm selling Trump short when it comes to his understanding of how this country feeds much of the world with our producers thriving (more or less) in the process. Unfortunately, there were moments in his inaugural speech delivered last Friday that seemed to say otherwise.
The new commander-in-chief wasted no time in establishing his populist theme that America had for too long been victimized by a crippling focus on foreign shores:
"For many decades, we've enriched foreign industry at the expense of American industry; subsidized the armies of other countries while allowing for the very sad depletion of our military; we've defended other nations' borders while refusing to defend our own; and spent trillions of dollars overseas while America's infrastructure has fallen into disrepair and decay.
"We've made other countries rich while the wealth, strength, and confidence of our country has disappeared over the horizon."
President Trump soon quickly turned to glad tidings of a new sheriff in town:
"From this moment on, it's going to be America first. Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families."
So far, so good, I suppose. What's not to like about a presidential pledge to make tending the home fires job one? But then came a line that should have caused every sodbuster and cowpuncher in the audience to check his wallet:
"We will follow two simple rules: Buy American and hire American."
With all due respect, Mr. President, that dog won't hunt. Not in our neck of the woods. The success of U.S. ag markets absolutely hinges on the vitality of global demand, demand that's predicated on a reasonable spending exchange within the world's community of trading nations (i.e., "I'll buy your best stuff and you buy my best stuff").
And for the love of long-term growth and financial security, let us never forget that 95% of human consumers live outside the borders of the United States.
Any type of economic isolationism would simply be disastrous for U.S. agriculture, which each year takes to the bank close to $130 billion in checks from foreign customers. Just consider a short list of commodities exported as a percent of total production: beef, 10%; chicken, 15%; corn, 15%; pork, 21%, soybeans, 48%; wheat, 42%.
While Trump's rule to "hire American" might be less of a market blow for agriculture (or at least less of a direct one), it could still prove quite problematic. Anyone who hasn't recognized how many sectors of agriculture remain dependent on foreign workers (e.g., meat packers, fruit growers, those in need of farm labor in general) is surely guilty of whistling past the blueprints for the wall.
Maybe Donald Trump is way ahead of me in all of this, already fully armed with dynamic plans to make U.S. agriculture a bigger juggernaut upon the world stage than ever before. But everyone who can tell the difference between a Bloodhound and a Chihuahua needs to make sure that the president knows that farmers and ranchers can't be made great again all by themselves.
Because they cannot.
John Harrington can be reached at harringtonsfotm@gmail.com
Follow John Harrington on Twitter @feelofthemarket
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