Post-Bulletin, MN
06-04-07
Trade agreements would boost state's pork industry
By Brandon Schafer
When it comes to U.S. trade policy, in recent years it has seemed more difficult
to gain bipartisan agreement among American policy-makers than to negotiate
with foreign governments.
That was certainly the case earlier this year as four Free Trade Agreements
(FTAs) negotiated by the Bush administration -- with Colombia, Panama, Peru
and South Korea - sat stalled in Congress over concerns about the lack of
adequate labor and environmental standards in the pacts.
After weeks of negotiations between congressional leaders and the
administration's trade-policy team, the stalemate was recently broken when
House Speaker Nancy Pelosi and U.S Trade Representative Susan Schwab
announced an agreement on new labor and environment provisions for these
and future FTAs.
With this crucial bipartisan breakthrough at the leadership level, the focus now
shifts to the rest of the Congress.
Minnesota pork producers fervently hope both political parties will unite behind
their leaders and quickly approve the pending FTAs because these trade pacts
will provide a much-needed boost to U.S. pork exports.
Just how important are pork exports to Minnesota's economy? Nearly 2,600 jobs
and $112 million of personal income are generated for the state from exports of
Minnesota-grown pork, according to Iowa State University economists Daniel
Otto and John Lawrence. More pork trade, resulting from these pending
agreements, would mean more jobs and more income.
Overall, the pork industry provides tremendous benefits to Minnesota. Otto and
Lawrence estimate that the state had more than $1.8 billion of gross receipts
from hog sales in 2005. This helped support about 20,000 pork-related jobs in
the state, ranging from input suppliers and producers to processors and
handlers, as well as Main Street businesses.
For U.S. pork producers, the economics of trade are simple: Exports currently
add $33.60 to the price they receive for each pig. The South Korean and Latin
American bilateral FTAs will collectively increase the value of exports to
producers by an additional $12.60 per head, according to Iowa State University
economist Dermot Hayes. The trade agreements also would give U.S. pork
producers easy access to those countries' markets, while their competitors in
Canada and the European Union would still face trade restrictions.
That trade agreements have benefited the pork industry is borne out by the
tremendous increases in pork exports to countries with which the United States
has pacts. Since the U.S.-Canada Free Trade Agreement went into effect in
1989, for example, U.S. pork exports to Canada have increased by $421 million,
and since implementation in 1994 of the North American Free Trade Agreement
with Mexico, pork exports to that country have increased by $446 million.
To help sustain the jobs and other economic activity created by the Minnesota
pork industry, particularly in the face of rising feed costs -- the result of the rapid
rise in corn-based ethanol production -- the state's pork producers need more
markets in which to sell their products.
Let's hope members of Congress will follow their leaders and pass the pending
FTAs. That would be good for U.S. pork producers, and good for Minnesota's
economy.
Brandon Schafer is a pork producer from Goodhue, Minn., and a member of the
executive board of the Minnesota Pork Producers Association