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Trade policy protects steel at cost of hurting agriculture

View from the Hill: Securing a trade win for steel, regardless of impact, is troubling policy for ag industry.

Paul Penner

January 7, 2019

4 Min Read
U.S. Trade Representative Robert Lighthizer
HOW LONG? U.S. Trade Representative Robert Lighthizer has long history as a lobbyist for the steel industry, but trade policy designed to protect steel and punish China for abuses is having serious, lasting impact on agriculture.

“As you go through doing your job, remember that you do not eat steel.” — One Senator’s advice to Robert Lighthizer, U.S. Chief Trade Negotiator.

In the Dec. 29 publication of The Atlantic, journalist Matt Peterson suggested this would be good advice to heed, not only for Lighthizer, but also for President Donald Trump, his cabinet and all elected members of Congress.

In a series of tweets, Peterson asks the question if the trade war felt “random or vindictive.” He goes on to write that it is not, but that Trump’s moves on trade were inspired by Lighthizer’s plan to put the steel industry back in the driver’s seat of restoring its dominance in American and global trade.

It is worth noting that Lighthizer has built his three-decade career as a lobbyist for the steel industry and that his office is packed with like-minded attorneys from his New York law firm Skadden, Arps, Slate, Meagher & Flom LLP, which has long represented steel industry giants, including U.S. Steel.

That said, it is of little comfort for the agricultural industry, in that it suggests we should be prepared for a longer than anticipated trade war with China, due to Lighthizer’s focus on attacking China head-on in an attempt to rein in China’s abuses in the steel industry, other trade matters, corporate espionage, theft of trade secrets, etc.

Peterson concludes, “The trade wars aren’t going away,” adding, Lighthizer wants structural changes and market opening by March. In my opinion, China is not likely to back away from a fight it deems vital to its national interests.

Whether the trade war continues or escalates further remains to be seen. However, with Trump’s deadline for imposing new trade sanctions on China looming by the March deadline, we will not have to wait much longer to find out.

Which brings us to the primary issue at hand: agriculture and global trade.

In the wheat industry, according to the Japanese milling industry, sources estimate U.S. wheat imports will fall by 50% within a few years after implementation of the CPTPP agreement which took effect at the end of 2018.

This is a direct consequence of Trump’s premature and ill-timed decision to cancel our participation in the TPP agreement, which has concluded without us requesting readmission into the agreement.

Additionally, as I write this, immigration also threatens to delay meaningful legislation as both sides dig in and continue to force a partial shutdown of governmental operations with USDA among the agencies hit with furloughs.

Discussion in some circles of social media suggest the trade war has already severely damaged American agricultural trade to the point where we must take another look at how our industry will adjust to the new realities of increasingly burdensome supplies, lower prices and lost markets.

One suggestion, which evokes memories of earlier times: we may be forced to re-start supply management programs of those earlier days and prepare for a transition away from producing for the market.

I have no stomach for it. Throughout my entire tenure as an advocate for agriculture, we fought to move away from price depressing federal subsidy schemes and invested thousands of man hours and millions of producer’s dollars to empower farmers to respond to the marketplace.

Rather than revert to a time-worn program of price supports, agriculture must increasingly do a better job to vet people who want to be our nation’s leaders, and more effectively communicate those policies and financial interests with our public servants — including the president in the White House — who are dedicated to protecting our interests with their political lives, if necessary.

We can no longer afford to simply trust our leaders to “do the right thing.” We must demand it. If they do not listen and heed our collective voices, it is time to let the ballot box to speak for us.

Back in the days of the Russian grain embargo, farmers said, never again should we allow our government to unilaterally make far-reaching decisions regarding trade, short of an all-out war.  Sadly, it is déjà vu, all over again.

I must agree with the Senator who gave advice to Lighthizer; you do not eat steel. I will add, you also work for farmers who produce food for the world.

Penner is a Marion County farmer and past president of the National Association of Wheat Growers. His email is [email protected].

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