World Grain - December 2016 - 6

FROM THE EDITOR-IN-CHIEF

Trade advocacy faces
tough views

hile wanting to avoid diving into
issues that were debated in this
year's presidential campaign in
America, one matter that has friends and
foes in the two parties is particularly important to grain-based foods. The issue involves
the pros and cons that are being introduced
in support of or in demonizing international
trade and its impact on the American economy. This is also a matter that does not have
universal support across grain-based foods
nor is it widely criticized even by those segments farthest removed from its effects. This
page has long supported trade agreements
that open foreign markets for the sale of
ZKHDWDQGÀRXUZKLOHUHFRJQL]LQJWKDWWKHLU
effect is not faultless.
Several international agreements currently are being considered by possible signatory nations and these are sources of much
anti-trade rhetoric. Indeed, these lengthy
negotiations along with the related need for
gaining approval of legislative bodies like
the U.S. Congress have helped make specific trade issues a source of intense debating.
2QH LV WKH VRFDOOHG 7UDQV3DFL¿F 3DUWQHUship that would extend many of the provisions of the North American Free Trade
Agreement (known widely as NAFTA). Another involves North Atlantic trade, which
historically has been quite open, and still
another involves trade relations between the
countries of the Western Hemisphere.
While any number of provisions in each
of these negotiations could be argued about,
it is the overall concept of trade agreements
between nations that needs defending at
this time. Much of the most bitter arguing
FHQWHUVRQZKHWKHUWUDGHLVEHQH¿FLDOWRQDtional economies, a matter that world history
DQVZHUVZLWKDUHVRXQGLQJDI¿UPDWLYH,WLV
WKLVDVSHFWWKDW¿WVPRVWQHDWO\LQWRH[SODLQing how advantages are created for every
part of grain-based foods, even for those
segments where serious questions may be
asked about attributes.
Convincing evidence in favor of trade
emerges when examining various sectors of
grain-based foods. Wheat producers, who
have experienced sharp price setbacks due

in part to America's lack of competitiveness
in foreign trade, have the greatest incentive
to press for agreements that would further
open foreign markets. Similarly, the companies that distribute and market wheat and
other grains, either by trading or by shipping,
have a similar positive stake. Negotiations
that have written an end to export subsidies
have helped facilitate trade based on market
moves alone. American millers at one time
enjoyed foreign markets for a large share of
output, but currently enjoy little export business beyond the home continent.
And then there are the food manufacturers, mainly bakers that do not participate in
foreign trade with a few exceptions. Here,
anti-trade arguments arise from the effect of
trade on the cost of grain-based ingredients,
such as the current market that has improved
margins by lowering ingredient costs but
threatens the opposite should exports start to
climb. The case convincing the food industry about the positives from trade expansion
rests on realizing that the export potential
VHUYHV DV D VSXU WR FURS SURGXFWLRQ VLJQL¿cantly larger than needed for domestic use
alone. Such production levels give bakers a
much broader selection of growing areas and
crop types from which to select ingredients
than would be available if grain production
was a fraction of current totals. The reality
of this situation is evident in the way U.S.
wheat plantings have fallen due to weak
prices, while export activity has spurred outturns in the Black Sea region.
Now that negotiations of a new international trade agreement under auspices of
the World Trade Organization have almost
ended, the line of attack against trade targets
areas where dismal economies are blamed
on prior trade pacts. Even if agricultural and
food issues will not be front and center in
international negotiations that may shortly
start, it is essential for industries like grainbased foods to be a strong advocate for trade
liberalization. It offers one of the best pathways to improving each industry sector.
Morton I. Sosland
Editor-in-chief

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