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Beefs and Beliefs

Trade deals keep getting worse

They tell us we're going to make more money and in the end, we don't.

 

It seems to me the people we've granted power to negotiate trade for us just keep saddling us with worse and worse deals.

The latest of these is the approval of Brazilian beef for shipment into the US. The screwing administered by this deal is twofold: First, I do not buy the argument that Brazil has foot and mouth disease (FMD) so well under control that it cannot spread here. The USDA says 14 states in Brazil are FMD-free. Hypothetically, this would be like saying it's safe if Kansas did not have FMD at the time, it would be safe to ship beef from Kansas, but not safe to ship beef from neighboring Oklahoma if it did have FMD.

That disease is extremely virulent and can't be detected until the symptoms break out several days after its contracted. That leaves plenty of time to spread the disease around and contaminate neighbors.

Just a couple years back I heard a veterinarian explain that FMD can be shed in great numbers and far and wide by a truckload of infected hogs going down the highway. Same with other animals. I wrote more about the spread of FMD in a past blog.

Can FMD get here on boxes or in bags of boxed beef?

I remain suspicious, despite reading this explanation about FMD and its unlikelihood of spread from Penn State.

Just as important, our beef markets already are turning down dramatically and the flood of cheap Brazilian beef will only hurt us more. Bill Helming, the private economist from Olathe, Kansas, recently said this lean beef product will arrive at significant discounts to US beef, even with a 26% tariff attached. He said it will be an "important and significant bearish market factor for U.S. beef cattle prices in the months and years ahead."

Another trade deal that doesn't look so hot to me now is the North American Free Trade Agreement (NAFTA), which became effective Jan. 1, 1994. I wrote a commentary for the BEEF editor's blog this week which delves into NAFTA's effects on the US beef industry in more detail, but the way I figure it the beef industry may be losing hundreds of millions of dollars each year in trade because of NAFTA.

I pulled my numbers from a study by the USDA Economic Research Service (USDA-ERS), called "NAFTA at 20: North America’s Free-Trade Area and Its Impact on Agriculture." That study compared a three-year period just before NAFTA enactment with three-year period 20 years later.

Now we're hearing many across agriculture pushing for passage of the Trans Pacific Partnership (TPP), just because they believe there might be a few dollars in it. Yet the bulk of that trade deal looks far worse and far more dangerous than anything yet enacted. I wrote a commentary on that for BEEF recently, too.

The export of US beef products is vitally important and needs to be pushed and improved, but we can't keep taking a beating on the promise it will make us money. If you look at these agreements, free trade is never really free and it's certainly not fair.

My question is this: Are we going to keep letting these people sell our souls in exchange for a few pennies?

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