13Jul2011
Good News, Bad News on the Trade Front
By Kraig R. Naasz, president and CEO, the American Frozen Food Institute.
A constant lament by many political and economic pundits is America’s growing trade deficit. Listen to the wags, and you’ll hear an almost constant stream of doom and gloom about America’s place in the world. Not surprisingly, they aren’t telling you the full story. When it comes to feeding a world marked by growing populations and developing nations, nobody does it better than America; and with a little help from Washington, we could be doing even better.
If you’re an exporter, you’re all too aware of the value of exports. If you don’t export, you also understand their value, as products not sold abroad may displace competing products within the U.S.
At the moment America is exporting frozen foods like never before. According to the U.S. Department of Agriculture, the U.S. exported $11 billion in frozen food products last year, up 50 percent from 2006.
That’s good news. Even better trade news for our industry came recently when the U.S. and Mexico signed a memorandum of understanding drawing to a close a long running commercial trucking dispute. As a result, Mexico will immediately slash by 50 percent a range of punitive tariffs it had slapped on U.S. exports of frozen potato products, sweet corn and ham, with complete elimination not far off.
U.S. companies can now compete to reclaim market share and jobs lost because of the Mexican retaliatory tariffs. You can read more about the end of the U.S.-Mexico trucking fight here.
In Congress, it’s more of a mixed bag on international trade. We’ve recently seen some very encouraging developments that could dramatically expand our industry’s reach into fast growing markets. However, those developments are being overshadowed by inside-the-Beltway procedural hi-jinks; the kind that rightfully infuriate so many business people who have little patience for partisan bickering.
Late last week the House Ways and Means and Senate Finance Committees approved legislation to implement pending U.S. free trade agreements with South Korea, Colombia and Panama, and extend trade preference programs with Andean and developing nations.
Food groups, automakers, manufacturers and almost every major U.S. industry support all three pacts, and tout the economic gains offered by each. For the frozen food industry, the agreements are rich with opportunities, as highlighted in this AFFI summary.
Unlike many issues in Washington these days, the agreements enjoy healthy support from Republicans and Democrats. So, what’s the hold-up?
Democrats want to couple the South Korea agreement with a renewal of the Trade Adjustment Assistance (TAA) program, which is meant to aid workers impacted by shifts in trade patterns. Without TAA, Democrats are unlikely to support passage of the South Korea agreement, or any of the three agreements for that matter.
On the other side, Republicans very much support the South Korea trade pact, but are adamant that the TAA program, with a price tag of $2.7 billion, should not be part of the package. Republicans believe TAA should pass or fail on its merits, and they, along with many economists, view it as an expensive program of questionable effectiveness.
This squabbling boiled over late last week when the Senate Finance Committee, over the objections of Republicans, approved legislation to enact the trade pacts that included a TAA renewal. In the House, the Ways and Means Committee, over the objections of Democrats, approved the trade agreements without the TAA program.
Got that? If you’re head is spinning, you’re not alone.
The White House, which has more than hinted it won’t send final legislation to Congress to approve the agreements absent TAA, had hoped Congress could approve all three agreements by mid-July. That prospect grows dimmer with each passing day.
What does this mean for the frozen food industry? It means if you haven’t done so already, you should utilize AFFI’s Friends of Frozen Food grassroots program to write your members of Congress and urge them to push these agreements across the finish line as quickly as possible.
It also means you should attend AFFI’s Government Action Summit Sept. 13-15 in Washington, D.C. Join us and meet face-to-face with your members of Congress and express your support for increased trade opportunities; introduce your company and the issues you care most about; meet with your industry peers and hear from leading Washington thinkers on the issues of the day.
If your company is affected by global trade, and who isn’t, then utilize your membership in AFFI to make your voice heard. I look forward to welcoming you to Washington in September. For more information, or to register for the AFFI Government Action Summit, click here.
