TRADE AGREEMENTS A SUCCESSFUL VENTURE FOR THE UNITED STATES
IL Corn is among the numerous organizations that depend on exports through trade and that anticipates the future of international trade agreements. The Trump administration recently chose to withdraw from the Trans-Pacific Partnership (TPP) and the president said on the campaign trail that he might reconsider the country’s position on the North American Free Trade Agreement (NAFTA). Until new trade agreements are established, we do know one thing: trade works. Our partnerships with other commodity organizations like U.S. Grains Council gives us a wealth of experience and information that highlight the success of international trade.
This article from the US Grains Council gives us an idea of its impact:
By the Numbers
• $1.5 trillion: Increase in real incomes due to liberalizing trade efforts since World War II (Peterson Economics)
• $82 billion: Annual economic output in 2014 due to exports of feed grains and grain products (Informa Economics)
• 371,536: Number of full-time equivalent jobs linked directly or indirectly to grain and grain product exports in 2014 (Informa Economics)
With trade suddenly a hot topic among Americans who usually may not question where their consumer goods come from - or their agricultural goods go - a few background facts offer important context. For agriculture, the fact is that trade has served the United States very well.
One of the most important issues to many Americans - and rightfully so - related to trade is the impact on our pocketbooks. Critics of trade are often quick to warn that an expansion of trade could significantly drive down wages. But the numbers tell a different story.
In fact, the U.S has 20 free trade agreements with countries that account for 10 percent of the global economy. Yet these deals are the basis for nearly half of America's exports.
American real incomes are 9 percent higher (or approximately $1.5 trillion) than they would otherwise have been as a result of U.S. trade liberalizing efforts since World War II, according to the Peterson Institute for International Economics.
And while technology has dramatically changed the manufacturing sector, the U.S. share of global manufacturing has held at 20 percent for 40 years, and U.S. manufacturing output has actually quadrupled since 1980 in large part spurred on by exports made possible by trade agreements, according to a U.S. Department of Commerce study.
The positive impact of grain trade on farmers' finances and the larger economy is also indisputable.
Exports of U.S. corn and corn products generated $74.7 billion in annual economic output in 2014, with overseas sales of all U.S. feed grain products contributing $82 billion, according to an analysis conducted by Informa Economics.
All feed grain products - a group that includes corn, corn products, sorghum and barley - contributed an increase to U.S. gross domestic product (GDP) of $33 billion over what would have otherwise occurred, affecting 371,536 jobs.
The same study found that every $1 in exports of grains and grain products generates an additional $3.23 in business sales across the United States The positive economic effects of grain exports benefit not only agriculture, but also wholesale trade, real estate, oil and natural gas production, and the banking and financial industries, so these results can be seen in every state across the nation.
On the other hand, if these exports were suddenly halted, more than 47,000 jobs and $2.8 billion in GDP would be lost in the farming, ethanol production and meat production industries alone, according to Informa.
Coming to the table with trading partners whose citizens represent 95 percent of U.S. agriculture's global customers is important to opening new opportunities and making sure that foreign governments that don't play by the rules are not given an advantage over U.S. workers and businesses. Trade negotiations give our farmers and workers a fighting chance in this skewed arena.
The facts are clear: trade has served America well, and new and expanded trade agreements will be integral to improving economic growth for the agriculture sector and rural economies.
More on the economic impact of grain exports is available through this interactive map from the U.S. Grains Council.
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