COLUMN:Weighing the price of trade
September 4, 2002
Recently the concept of international trade has become a much-debated topic. Questions about the effects this will have on the U.S. trade and economy, as well as the eventual ruin of separate national markets and creation of one world market makes many nervous. International trade has taken place since the earliest of times. Back in the early days many people with various ethnic backgrounds, customs, and trades came together and bartered their goods. International trade has affected agriculture since the beginning as well. Understanding market trends and all that supply-and-demand stuff may seem a little dizzying at times.
However, the economics of international trade are very relevant to the lives of each and every American, including those in the agriculture industry. Trade is a concept that agriculture has been closely tied to since the beginning. International agriculture trade, however, is a little different.
How will a world market affect the agriculture industry? Will it kill our market? By opening up the market our agriculture industry will see increases and decreases. Australia is currently attempting to heighten our quotas on beef imports, as is Brazil. The U.S. beef producers are fighting this because of the very large effects it would have on a local producer’s ability to market their beef in the U.S. by keeping the cost of the foreign beef much lower due to differences in the land and resources.
Brazil and Australia hope to provide an attractive alternative for U.S. consumers who patronize such companies as McDonald’s and Burger King. In return these countries would be receiving large premiums on the sale of their meat to the United States as compared to their own country.
Without careful consideration a World Trade Organization could create a very strained U.S. market. Currently the agriculture industry sees a somewhat bleak picture. Agriculture graduates find it difficult to find jobs; constant reorganizations and buy-outs make a weak industry to join. International trade could be an instant market jump and increase ideas and needs. Nevertheless, it is very important to keep international trade at arm’s length and try to not consumed by the instant benefits, without realizing the long-run affects. Keeping a careful balance between stimulation of our markets using international trade and completely dissolving our abilities to be somewhat self-sufficient as a nation is essential.
International trade would benefit the United States in numerous ways, as well as helping the needs of many other countries. China is a prime example. Originally international trade was used to feed those in need, however, now the United States is attempting to improve the Chinese farmer’s understanding of agriculture, while in turn China is sharing their knowledge with us. This benefits both sides and creates a much-needed source of relations between the two countries.
Two hog farmers, one from the U.S. and the other from China, on the average probably relate better than two diplomats with nothing in common. Idea exchange is probably a much better way to create a bond between two countries than any other form of international relations. Obviously this increased market would also create a helpful stimulus to the U.S. agriculture market.
A world market would create a specialized venue and there would be less versatility because some countries will have perfected agriculture processes while others will not have. There would be many other variables added in as well. An example of specialization would be corn and swine, the United States is internationally known for these two entities. Many people would find this threatening, especially because the concept of versatility in the ag industry is heavily emphasized. This is due to the inconsistent conditions often associated to agriculture, things such as weather.
International agriculture trade has many advantages and disadvantages. It seems that the agriculture industry would be smart to step lightly around this trade issue. The United States agriculture industry would be well advised to look carefully at the concept of international trade; it’s sort of like salt – too little can be bad, but too much can be worse.
Danelle Zellmer is a junior in public service and administration in
agriculture from Atlantic.