Des Moines Register
06-12-07
Trade deals would benefit pork industry, Iowa economy
By GREG CARLSON
IOWA VIEW
When it comes to U.S trade policy, it has seemed more difficult in recent years to
gain bipartisan agreement among American policymakers than to negotiate with
foreign governments.
That was certainly the case earlier this year as four free trade agreements
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 agreements.
It is critical that this bipartisan consensus at the leadership level carry through to
the rest of the Congress, so that the economic benefits of increased two-way
trade can begin to flow. Iowa pork producers hope both political parties will unite
behind their leaders and quickly approve the pending free trade agreements
because these pacts will provide a much-needed boost to U.S. pork exports.
Just how important are pork exports to Iowa's economy? Nearly 8,100 jobs and
$283 million of personal income are generated for the state from exports of Iowagrown 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 Iowa. Otto and
Lawrence estimate that the state had $4.3 billion of gross receipts from hog sales
in 2005. This helped support 62,500 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 free trade agreements would collectively increase the value of
exports to producers by an additional $12.60 per head, according to ISU
economist Dermot Hayes. While U.S. pork producers would gain easy access
to those countries' markets, their competitors in Canada and the European Union
would still face trade restrictions.
U.S. bilateral trade liberalization has been a boon to the nation's pork industry.
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. 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 Iowa pork
industry, particularly in the face of rising feed costs - a result of the rapid rise in
corn-based ethanol production - the state's pork producers need more markets in
which to sell their products.
Passing the pending free trade agreements would be good for U.S. pork
producers, and that's good for Iowa's economy.
GREG CARLSON is a pork producer from Stratford.