Monthly Archives: July 2019

ITES Applies for Grant From the Coop to Present SWEAT

The International Trade Education Squad requests PSFC grant for an ITES public forum about the consequences of NAFTA on US workers.

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The International Trade Education Squad requests a grant from the Coop of $4,100 and 20 FTOP work-slots to be allocated for an ITES public forum about the consequences of NAFTA on US workers in the form of a ‘music stand reading’ on October 22ndand 28th  in collaboration with Irondale Theater Ensemble of Fort Greene, of the Pulitzer Prize winning play by Brooklyn’s own Lynn Nottage – SWEAT.   The funded event will be free to Coop members.

Project Design    

As part of the mission to keep Coop members informed about the impact of pending international trade agreements, the 7 members the International Trade Education Squad, have organized quarterly public forums.   For the coming quarter, we propose a different kind of educative event.   In collaboration with the Irondale Theater Ensemble of Fort Greene, we want to produce a ‘music stand reading’ of a Pulitzer Prize winning play, SWEAT by Lynn Nottage.  The play dramatizes the effects on workers in a factory in Reading Pa between 2000 and 2008 as it closes to move to Mexico.

Irondale will contribute their space, administrative capacity and the artistic production.

ITES requests that the Coop contribute $4,100 and 20 FTOP work-slots to support the work.  ITES members will take responsibility for creating and coordinating the event and, with the help of FTOP workers, preparing written background material and final documentation of the event, logistics of ‘house management’, and tickets.    The two performances, Tuesday October 22ndand Monday October 28th, will be free to Coop members.

Timing is crucial.  SWEAT reveals the consequences to US workers of a trade agreement created in secret by corporations to protect investors’ profits, which then becomes binding policy in signatory countries.      The current administration wants to send the huge USMCA (US-Mexico-Canada Agreement) aka NAFTA 2 to Congress for one up-or-down vote before this year ends.

Text of NAFTA 2 is still being negotiated.   Four issues prioritized by the Trade Justice Movement remain unresolved:  1) enforceable environmental protections, 2) elimination of the Investor State Dispute Settlement (ISDS)  3) eliminating the extension of Big Pharma patents on new biologic and bio-similar drugs, and 4) enforceable defense of the rights of workers.

ITES follows these debates by posting articles here on this blog and via our own writing in the Linewaiters Gazette that answer questions on the content of the agreement and the process legislated to pass the agreement through congress that is mandated in federal Trade Promotion Authority legislation (TPA aka Fast Track) (2015). When the text of this new NAFTA is made public, we will summarize it, publicize it, participate in the debate and decide whether to support or oppose.

Updated documentation about the SWEAT project will be posted regularly on the blog and on the ITES Facebook page.   We expect a vote on Coop support for ‘The Coop does SWEAT at Irondale in October’ will be voted on at the August 27thGM.

BUDGET

Total $4,100 grant + 15 FTOP shifts (Money to be administered by the Irondale treasurer, FTOP shifts by Willy, co-leader of ITES)

Rights to produce SWEAT $200

Salaries $3,000 (for eleven actors and four theater staff (15) at $200 per person for four sessions of three-and-a-half hours each)

Catering $400- (Supper for 25 on the evening of rehearsal Oct 21st@ $15 per person $350Snacks for the audience both evenings beverages & cookies or raisins & peanuts $50)

Copying $250- (Scripts, publicity posters, programs)

Administrative expenses $250- (Transportation, unexpected costs)

FTOP TASKS
Help with research, writing and editing material for the program and for actors to study in preparation

Administration and copying tasks, including reservations and tickets

Preparing documentation of the project for exhibition

SCHEDULE

August 27th GM Members vote to support Coop does SWEAT at Irondale

Then, assuming the proposal is passed in August

Preparation of printed material for the performers and the program

Distribution of script to actors with accompanying material for study

Rehearsal – Full reading with supper 6 to 10 PM Monday, October 21st

Performances 6:45 to 9:30 Tues Oct 22, Mon Oct 28

Documentation – writing and pictures to be published and exhibited prepared by November 10th.

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MEXICO OPEN TO CHANGES, BUT NOT REOPENING USMCA:

 Mexico’s Undersecretary for North America Jesús Seade said his country could agree to changes to USMCA — which it already ratified — but any change should happen outside of the deal’s underlying text.

97f081d3b11530662177_standard_desktop_medium_retina-822x462“There are many ways to attend to issues without having to reopen the deal. So, we’re very willing to explore — but things that are worth it, justified and aren’t against Mexico’s interests,” Seade said Friday night in a call with POLITICO and Mexican reporters.

But if it comes to changing USMCA’s text, Seade drew a line: “No, no, no, no, no. We are not willing to. We’d have to see what type of change, what the scale of it is … what can be reached without reopening the deal, but, above all, depends on decisions with the interest of Mexico.”

Trip down south: A delegation of U.S. lawmakers, led by House Ways and Means Trade Subcommittee Chairman Earl Blumenauer, met on Friday with Seade, Mexican President Andrés Manuel López Obrador, Mexican Labor Secretary Luisa María Alcalde and others to discuss USMCA and Mexico’s labor and environmental standards.

The meeting was an opportunity for Mexican officials to clarify issues with USMCA tied to Mexico, Seade said. They discussed how to address certain concerns, such as strengthening the dispute settlement mechanism, but “we didn’t arrive at anything,” he said. Seade specified that the meeting was not to negotiate, only to offer information.

COUNTDOWN FOR USMCA PROGRESS REPORT: The nine Democrats tapped by House Speaker Nancy Pelosi to secure changes to USMCA have been meeting with Lighthizer for almost a month to reach a deal their conference will support. They’re scheduled to meet this week to discuss enforcement, which Pelosi has called the pact’s “overarching issue.”

With just days before Congress’ August recess, it’s unclear how much progress the group has made. But staff will likely work through the break with USTR and Democrats to shuttle proposals so lawmakers can return closer to passing the deal.

House Ways and Means Chairman Richard Neal said last week that Democrats have already “laid out comprehensive concerns and constructive proposals” in three of their top issue areas — environment, labor and access to medicines. But he indicated they’re still waiting to hear from Lighthizer on how the Trump administration will address their concerns.

Optimism in Mexico: Seade said Friday he’s in constant contact with Lighthizer and believes that with some four to six weeks of work between Democrats and USTR, they could reach an agreement that would allow Congress to pass USMCA sometime in September or October.

“I don’t think their concerns are insurmountable challenges,” Seade said.

House Members Urge Administration to Take Action To Lower Drug Prices in USMCA Trade Talks

Representatives Jan Schakowsky, Susan Davis, Rosa DeLauro, Lloyd Doggett, Raja Krishnamoorthi, and Angie Craig led over 100 of their colleagues in sending a letter to U.S. Trade Representative Robert Lighthizer and asking him to remove biologics exclusivity language from the pending language in the U.S.-Mexico-Canada Agreement (USMCA) trade agreement.

Rep. Krishnamoorthi Standard HeadshotThat language would lock the United States into at least 10 years of marketing exclusivity for biologic drugs and hinder Congress from taking action to increase competition and enhance patient access to more affordable prescription drugs.

Congresswoman Schakowsky and DeLauro are members of the USMCA House Democrats Working Group, and hand delivered the letter to Ambassador Lighthizer earlier today.

“Today, along with more than 100 of our colleagues, we delivered this letter to Ambassador Lighthizer. We wrote and began circulating the letter before the Speaker named us to the NAFTA Working Group. We are committed to our efforts there, and appreciate the Ambassador’s time and efforts up to this point,” said Congresswomen Schakowsky and DeLauro. “However, unless and until President Trump instructs Ambassador Lighthizer to remove the biologics exclusivity language from the text of the United States-Mexico-Canada trade agreement, as well as other parts of the text that would hinder Congress’ ability to lower prescription drug prices for American families, his talk about wanting to lower drug prices is just that: talk.”

“Including language in a trade agreement that, intentionally or not, restricts Congress’s ability to pass legislation to address high prescription drug prices, is not the sort of improvement to NAFTA on which the president campaigned. In fact, it’s quite the opposite,” said Congresswoman Davis. “We need trade agreements that both preserves our access to North American markets and does everything it can to improve the real wages of workers in the United States.”

“Having done nothing yet to lower drug prices, President Trump’s trade agenda would protect pharmaceutical monopolies and limit the ability of Congress to restrain price gouging,” said Congressman Doggett, Chairman of the Health Subcommittee on the Ways and Means Committee. “To protect American consumers, the special interest provision that Big Pharma got added to this agreement must be removed.”

“As we work to reduce the price of prescription drugs, it’s imperative that we don’t restrict our ability to increase competition through shortening exclusivity periods,” said Congressman Raja Krishnamoorthi, Chairman of the Economic and Consumer Policy Subcommittee on the Oversight Committee. “Effective trade agreements should fundamentally be about creating fairer markets and this provision would do the opposite to the detriment of the American people.”

“From family farms to union halls, my constituents tell me they want Congress to lower the cost of their healthcare, not give handouts to big drug companies,” said Rep. Craig. “I urge Ambassador Lighthizer to work in the best interests of Minnesotans by protecting Congress’ ability to lower prescription drug costs.”

A copy of the final, signed letter is available HERE.

R-CALF USA Asks House Leaders to Restore Meat Labeling in USMCA

Billings, Mont. – In a letter sent today to the leadership of the U.S. House of Representatives, Speaker Nancy Pelosi and Minority Leader Kevin McCarthy, R-CALF USA asks that their approval of the new U.S.-Mexico-Canada Agreement (USMCA) be contingent upon the restoration of mandatory country-of-origin labeling (COOL) for beef.

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The letter explains that mandatory COOL is the only means by which U.S. cattle producers can offer consumers a choice to purchase the best beef in the world produced under the more stringent U.S. health, safety and environmental standards by American cattle producers, or to purchase beef produced under lesser standards in foreign countries.

“Without mandatory COOL, importers source cheaper imported beef from over 20 foreign countries and they source live cattle from Canada and Mexico. They then can offer all of this cheaper-sourced beef to consumers as if it were produced by American farmers and ranchers. This occurs because the 2015 repeal of the COOL law for beef and pork eliminated the requirement that all imported beef retain its foreign label through retail sale. And, because current law allows all beef that is processed in a U.S.-based packing plant to bear a ‘Product of U.S.A.’ label,” the letter states.

It also explains that including COOL in the USMCA eliminates the threat of sanctions by the World Trade Organization (WTO) because once Canada and Mexico sign an agreement that includes COOL, neither country can reignite their WTO challenge. The group further states that because the WTO only criticized the labeling of beef derived from imported cattle, and all of those imported cattle come from Canada and Mexico, no other country would have standing to complain about the COOL law.

The letter also states that U.S. trade negotiators were unduly influenced to omit COOL from the negotiations by the powerful beef importers, who the group states are making windfall profits from selling cheaper, undifferentiated imports to unsuspecting consumers and who want to continue doing so.

The group insists it “should be a fundamental right for all Americans to know under which country’s food safety regime their food was produced. Today, for beef and pork, American consumers cannot obtain that information even if they ask and American cattle producers have no means to cause beef purveyors to label their USA product. American consumers and cattle producers are reliant upon Congress to rectify this injustice.”

In conclusion, R-CALF USA states it urges Congress to condition its approval of the new USMCA on the restoration of mandatory COOL for beef so U.S. cattle farmers and ranchers can begin to compete in their own marketplace and U.S. consumers can begin supporting the American economy by choosing to buy American beef.

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R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is the largest producer-only cattle trade association in the United States. It is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. For more information, visit www.r-calfusa.com or call 406-252-2516.

FRUSTRATION ALL AROUND IN USMCA TALKS

 The Trump administration is turning up the pressure on Congress to pass its signature trade deal with Mexico and Canada, with officials increasingly frustrated at the pace of talks. House Democrats tasked by Speaker Nancy Pelosi to negotiate changes to the deal are also frustrated that Lighthizer hasn’t budged in addressing their concerns.

S1-CY190_PELOSI_M_20190711121348Still working: Lighthizer and the nine Democrats on the USMCA working group will meet again today to discuss environmental concerns. But they’ll likely also talk about the other three prevailing issues — enforcement, labor and drug pricing.

“I think all the parties would, at least, agree that the dialogue is sound in that the conversation is moving along,” House Ways and Means Chairman Richard Neal, who leads the working group, said Tuesday after meeting with Lighthizer and Pelosi.

Neal, who said he’s now speaking with USTR almost daily, acknowledged that “we’re all frustrated.” USTR declined to comment on the status of negotiations.

Don’t expect a pre-recess breakthrough: Neal said Tuesday he doesn’t see Democrats and Lighthizer reaching an agreement in principle before the August recess.

But Rep. Jan Schakowsky, another working group member, told Morning Trade that reaching a breakthrough depends on Lighthizer moving to please Democrats. “If the trade representative will agree with us, we can do it tomorrow,” she said.

Asked if there is talk of putting the deal to a vote this fall, Neal said: “It’s pretty obvious that’s what the administration, meaning the ambassador, is pushing for. I don’t think we want to let it languish in the next year.”

White House plans August push: During the recess, White House officials will fan out to districts where they believe are “gettable” Democrats, a business lobbyist told Morning Trade. That includes Democratic districts that President Donald Trump carried in 2016 or those that flipped from red to blue in the 2018 midterms.

The effort will try to gin up support for the deal with visits to local companies that would benefit from the updated NAFTA. The administration is also planning to use local media.

NAM jumps in: The National Associations of Manufacturers is hosting a fly-in today to push for USMCA passage. More than 130 representatives participate in more than 120 meetings with House Democrat and Republican offices.

Republicans beat the drum for a voteNine Senate Republicans took to the floor Tuesday afternoon to offer a forceful show of support for USMCA, emphasizing the need to pass it as soon as possible in order to reap the economic benefit and return some element of certainty to U.S. farmers and manufacturers who rely on Canadian and Mexican export markets.

A PRECEDENT FOR AMENDING TRADE DEALS: Twelve years ago, the Bush administration was faced with a similar situation. Democrats were demanding changes to trade deals with South Korea, Panama, Peru and Colombia before voting on them.

Secret negotiations led to what’s known as “the May 10th Agreement,” which addressed a long list of Democratic concerns. At that point, South Korea and Panama had not yet passed their trade agreements with the U.S., so they were able to incorporate the new provisions into the text of their respective deals.

And the others? Peru passed its trade deal with the U.S. in 2006, so it had to approve a “protocol of amendment” in June 2007 for the changes.

In Colombia’s case, legislators voted in June 2007 to approve the unamended agreement. But it took several more months for the amendments demanded by the U.S. to pass both the Colombian House and the Senate.

 
The Citizens Trade Campaign (CTC) is a national coalition whose members include Americans for Democratic Action, American Federation of Teachers, Communications Workers of America, Friends of the Earth U.S., Institute for Agriculture and Trade Policy, International Association of Machinists and Aerospace Workers, International Brotherhood of Boilermakers, International Brotherhood of Electrical Workers, International Brotherhood of Teamsters, International Union of Bricklayers and Allied Craftworkers, International Union of Painters and Allied Trades, National Family Farm Coalition, National Farmers Union, Pubic Citizen’s Global Trade Watch, Sierra Club, Solidarity Committee of the Capital District, UNITE HERE, United Methodist Church General Board of Church and Society, United Brotherhood of Carpenters, United Mineworkers of America, United Steelworkers, United Students Against Sweatshops and Witness for Peace, as well as regional, state, and city-based coalitions, organizations, and individual activists throughout the United States.

Farm and food groups to Congress: Reject the USMCA

The updated trade deal will lock in rules that have devastated family farms and expanded corporate control over agriculture and food in the United States, Canada and Mexico.

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WASHINGTON—The current version of the United States-Mexico-Canada Agreement (USMCA) must be rejected, as it ignores the fundamental shortcomings of its predecessor—the North American Free Trade Agreement (NAFTA)—and will lock in trade rules that have devastated family farms and expanded corporate control in agriculture and food, according to 59 organizations. These groups, including family farm, ranching, local food, public health and sustainable agriculture organizations, delivered a letter to Congress on Wednesday urging a reworked trade agreement to serve the interests of farmers, consumers and the environment in all three nations.

Since NAFTA’s implementation, nearly 250,000 small to medium scale farmers have been driven out of agriculture. According to the United States International Trade Commission’s report on the economic benefits of USMCA, agriculture will grow by just 1,700 jobs over the full period of its implementation.

While family farmers are and will be crushed, global agribusiness is thriving. The USMCA serves as a deregulatory wishlist for business, enacting new obstacles toward the enacting of sensible rules on food safety, agricultural biotechnology, food labeling and pesticide usage. Within USMCA’s framework, regulators must choose the option that least disrupts trade, rather than what protects farmers and workers, our water or our health.

Like its predecessor, the New NAFTA largely benefits agribusiness companies that operate in the United States, Canada and Mexico at the expense of family farms, consumers and the environment. USMCA must be rejected and reworked to serve the interests of the people of all three nations.

COMMENTS FROM SIGNATORIES:

Wenonah Hauter, Executive Director, Food and Water Watch: “Congress must not approve NAFTA 2.0. This new version of a damaging trade deal would weaken our food safety standards, undermine many U.S. farmers raising crops like tomatoes and strawberries and promote unsustainable GMO crops.”

Jim Goodman, President, National Family Farm Coalition: “Nearly a quarter of a million family farmers have gone out of business since the original NAFTA was signed in 1994. As agribusiness has consolidated, multinational corporations have increased their profit margins while farmers sink deeper into debt and rural communities have withered. The new USMCA promises to accelerate these trends. Congress should reject this proposal and instead insist on trade rules that will be fair to family farmers, workers, and consumers.”

Karen Hansen-Kuhn, Director of Trade and Global Governance, Institute for Agriculture and Trade Policy: “Many of our organizations pushed for changes in USMCA, beginning with restoring Country of Origin Labeling for meat. But those proposals were ignored. The New NAFTA does nothing to address the changes family farmers have been demanding for decades, nothing to improve farm incomes, and nothing to lift prices. Instead, it locks in a corporate-friendly status quo that will only lead to more crises in the future.”

The letter:

We write to you as representatives of US family farm, ranching, farmworker, local foods, public health, and sustainable agriculture organizations to urge you to reject the current version of the U.S.-Mexico-Canada Trade Agreement (USMCA). The new agreement does nothing to fix the fundamental shortcomings of the previous North American Free Trade Agreement (NAFTA), while further locking in trade rules that have devastated family farms and expanded corporate control over agriculture and our food system in all three countries.

The situation confronting family farmers is dire. According to data from the 2017 U.S. Census of Agriculture, nearly 250,000 small to medium scale farmers have been driven out of agriculture since the original NAFTA began. The promised benefits of increased farm exports and profits under NAFTA have not trickled down to farmers, farmworkers or rural communities. Instead, a handful of well-financed multinational firms have captured these export markets through vertical integration and now control greater shares of agricultural inputs, seeds, and equipment, while there are fewer buyers of crops, meat and poultry. In the absence of effective federal anti-trust enforcement in the agriculture sector, the diminished competition forces farmers to accept whatever prices — and conditions — are dictated by agribusinesses. U.S. agribusiness exports have, in turn, economically undercut family farmers abroad and, coupled with this removal of land tenure rights compelled in the first NAFTA negotiations, driven millions of Mexican farmers from their lands, forcing many of them to become farmworkers in Mexico or the US under precarious and unfair conditions.

Even the administration’s own report on USMCA projects vanishingly small economic benefits. The International Trade Commission (ITC) forecasts that USMCA will generate just 1,700 new jobs in agriculture over the full period of its implementation. The ITC’s economic simulations of the impacts of agricultural market access changes in USMCA project an increase in US agriculture and food exports of $435 million and increases in imports of $80 million.

When it comes to agriculture trade, however, farmers and rural communities can’t simply accept the conditions that this deal reinforces. In contrast to the mildly optimistic ITC projections, a new study by the University of Florida estimates that the failure to resolve problems confronting U.S. seasonal fruit and vegetable producers and the workers they depend upon could result in upwards of 8,000 jobs lost and a loss of $471.4 million in annual revenue to Florida’s overall economy if USMCA is ratified without changes.[1]

The new USMCA takes a step back in other areas, reading like a deregulatory wish list for global agribusiness firms who operate in all three countries. It would create new obstacles to enact sensible rules on food safety, agricultural biotechnology, food labeling and pesticides. Rules on Sanitary and Phytosanitary Standards, Technical Barriers to Trade and Agriculture would direct regulators to choose the option that least distorts trade, rather than what best protects public health or the environment. A new chapter on Good Regulatory Practices would require regulators to submit new and existing rules to review by stakeholders from all countries. If approved, these new provisions would undoubtedly be extended to future negotiations with the EU, Japan and the UK. Taken together, these new rules create barriers to basic protections for farmers and workers, the land, our water and our health.

Many of our organizations made proposals to replace NAFTA with a better set of trade rules that would advance fair, healthy and sustainable food and farming systems. We called on the US government to press Canada and Mexico to withdraw their World Trade Organization complaints to Country of Origin Labeling for meat so that Congress could restore this popular program advancing market transparency and local food systems. Even this modest proposal was rejected.

We urge you to reject the USMCA and instead insist on new trade rules that would serve the interests of family farmers, ranchers, indigenous communities, farm and food chain workers, consumers and our environment in all three nations.

Sincerely,

ActionAid USA
Agroecology Research-Action Collaborative
Alabama State Association of Cooperatives – Forkland, Alabama
Alianza Nacional de Campesinas, Inc.
American Indian Mothers, North Carolina
Ashtabula, Geauga, Lake Counties Farmers Union, Ohio
Atrisco Land Grant, Atrisco, New Mexico
Black Farmers and Agriculturalists Association, Tillery, North Carolina
Black Farmers and Ranchers of New Mexico
California Institute for Rural Studies, Davis, California
Community Alliance for Global Justice
Community Farm Alliance
Concerned Citizens of Tillery, North Carolina
Cottage House, Inc. Ariton, Alabama
Dakota Resource Council, North Dakota
Dakota Rural Action, South Dakota
Family Farm Defenders
Farm and Ranch Freedom Alliance
Farm Women United
Food for Maine’s Future
Food & Water Watch
Greene County Democrat, weekly newspaper – Eutaw, Alabama
GROW North Texas
iEat Green, New York
Idaho Organization of Resource Councils
Independent Cattlemen of Wyoming
Iowa Citizens for Community Improvement
Institute for Agriculture and Trade Policy
Kansas Black Farmers Association, Nicodemus, Kansas
La Mujer Obrera, El Paso, Texas
Land Stewardship Project, Minnesota
Local Environmental Agriculture Project, Inc., Virginia
Main Street Cheese, LLC, New Hampshire
Mississippi Association of Cooperatives, Jackson, Mississippi
Missouri Rural Crisis Center
National Family Farm Coalition
National Latino Farmers & Ranchers Trade Association
Northern Plains Resource Council, Montana
Northeast Organic Farming Association – Interstate Council
Northeast Organic Farming Association, New Hampshire
Northeast Organic Farming Association, New York
Northwest Atlantic Marine Alliance
Northwest Forest Worker Center, Albany, California
Oklahoma Black Historical Research Project, Inc.
PLANT (Partners for the Land & Agricultural Needs of Traditional Peoples)
PLBA Housing Development Corporation – Gainesville, Alabama
Powder River Basin Resource Council, Wyoming
Progressive Agriculture Organization
Real Food Challenge
Rural Advancement Fund of the National Sharecroppers Fund, Orangeburg, South Carolina
Rural Coalition/Coalición Rural
Rural Vermont
Savage Acres LLC, Virginia
Slow Food North Shore, New York
Slow Food USA
Union of Concerned Scientists
Western Colorado Alliance
World Farmers, Lancaster, Massachusetts
Western Organization of Resource Councils

 

[1] Available at https://fred.ifas.ufl.edu/pdf/economic-impact-analysis/MexicoFruit&Vegetable.pdf

Trump Is Losing His Trade Wars

Donald Trump’s declaration that “trade wars are good, and easy to win” will surely go down in the history books as a classic utterance — but not in a good way.

U.S. President Donald Trump and China's President Xi Jinping make joint statements at the Great Hall of the People in Beijing

U.S. President Donald Trump and China’s President Xi Jinping make joint statements at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Jonathan Ernst

Instead it will go alongside Dick Cheney’s prediction, on the eve of the Iraq war, that “we will, in fact, be welcomed as liberators.” That is, it will be used to illustrate the arrogance and ignorance that so often drives crucial policy decisions.

For the reality is that Trump isn’t winning his trade wars. True, his tariffs have hurt China and other foreign economies. But they’ve hurt America too; economists at the New York Fed estimate that the average household will end up paying more than $1,000 a yearin higher prices.

And there’s no hint that the tariffs are achieving Trump’s presumed goal, which is to pressure other countries into making significant policy changes.

What, after all, is a trade war? Neither economists nor historians use the term for situations in which a country imposes tariffs for domestic political reasons, as the United States routinely did until the 1930s. No, it’s only a “trade war” if the goal of the tariffs is coercion — imposing pain on other countries to force them to change their policies in our favor.

And while the pain is real, the coercion just isn’t happening.

All the tariffs Trump imposed on Canada and Mexico in an attempt to force a renegotiation of the North American Free Trade Agreement led to a new agreement so similar to the old one that you need a magnifying glass to see the differences. (And the new one may not even make it through Congress.)

And at the recent G20 summit, Trump agreed to a pause in the China trade war, holding off on new tariffs, in return, as far as we can tell, for some vaguely conciliatory language.

But why are Trump’s trade wars failing? Mexico is a small economy next to a giant, so you might think — Trump almost certainly did think — that it would be easy to browbeat. China is an economic superpower in its own right, but it sells far more to us than it buys in return, which you might imagine makes it vulnerable to U.S. pressure. So why can’t Trump impose his economic will?

There are, I’d argue, three reasons.

First, belief that we can easily win trade wars reflects the same kind of solipsism that has so disastrously warped our Iran policy. Too many Americans in positions of power seem unable to grasp the reality that we’re not the only country with a distinctive culture, history and identity, proud of our independence and extremely unwilling to make concessions that feel like giving in to foreign bullies. “Millions for defense, but not one cent for tribute” isn’t a uniquely American sentiment.

In particular, the idea that China of all nations will agree to a deal that looks like a humiliating capitulation to America is just crazy.

This raises the stakes: U.S. business was hysterical at the prospect of disrupting Nafta, because so much of its production relies on Mexican inputs. It also scrambles the effects of tariffs: when you tax goods assembled in China but with many of the components from Korea or Japan, assembly doesn’t shift to America, it just moves to other Asian countries like Vietnam.

Finally, Trump’s trade war is unpopular — in fact, it polls remarkably poorly — and so is he.

This leaves him politically vulnerable to foreign retaliation. China may not buy as much from America as it sells, but its agricultural market is crucial to farm-state voters Trump desperately needs to hold on to. So Trump’s vision of an easy trade victory is turning into a political war of attrition that he, personally, is probably less able to sustain than China’s leadership, even though China’s economy is feeling the pain.

So how will this end? Trade wars almost never have clear victors, but they often leave long-lasting scars on the world economy. The light-truck tariffs America imposed in 1964 in an unsuccessful effort to force Europe to buy our frozen chickens are still in place, 55 years later.

Trump’s trade wars are vastly bigger than the trade wars of the past, but they’ll probably have the same result. No doubt Trump will try to spin some trivial foreign concessions as a great victory, but the actual result will just be to make everyone poorer. At the same time, Trump’s casual trashing of past trade agreements has badly damaged American credibility, and weakened the international rule of law.

Oh, and did I mention that McKinley’s tariffs were deeply unpopular, even at the time? In fact, in his final speech on the subject, McKinley offered what sounds like a direct response to — and rejection of — Trumpism, declaring that “commercial wars are unprofitable,” and calling for “good will and friendly trade relations.”

By Paul Krugman for the NY Times

NAFTA 2.0 poses disaster for Florida tomato, strawberry, bell pepper growers

A University of Florida study forecasts state tomato, strawberry and bell pepper growers could lose up to $400 million a year if Congress ratifies the U.S.-Mexico-Canada Agreement (USMCA) without measures preventing Mexico from “dumping” subsidized produce into American markets.

NC-Strawberry-GrowerThe University of Florida’s Institute of Food and Agricultural Sciences (UF/IFAS) study examined potential impacts on three crops if the updated iteration of the 1994 North American Free Trade Agreement (NAFTA) is ratified as is by Congress.

According to the study, agriculture products imported from Mexico have cost Florida farmers up to $3 billion since 2000.

“Similar to NAFTA, the current version of the proposed USMCA does not provide protections for U.S. growers, particularly those that produce for the winter season market, from seasonal losses,” the study states. “The continuation of these trends will likely result in continued losses for the fruit and vegetable industry (and overall economy) in Florida.”

The broader implications for Florida’s $12 billion a year agricultural industry and the 100,000 residents it employs has spurred the state’s Congressional delegation to introduce a bill that restores protections for Florida farmers written into earlier versions of the USMCA.

The “Defending Domestic Produce Production Act,” introduced as Senate Bill 16 by Florida Republican Sen. Marco Rubio, and as House Resolution 101 by Rep. Vern Buchanan, R-Sarasota, will allow farmers to bring grievances over seasonal “dumping” of subsidized produce to arbitration on a regional rather than national basis.

“Every American grower should have the right to bring a case against unfairly traded imports that cause legitimate injury to our domestic producers,” the Florida Strawberry Growers Association said in a recent statement, noting “bipartisan support by every member of the Florida delegation … speaks volumes to the importance of this legislation.”

Rubio introduced his version of the bill on Jan. 3. It was referred to the Senate Finance Committee, where it remains. Buchanan’s bill was introduced on Jan. 31. It remains unheard before the House Subcommittee on Trade.

“Our beleaguered growers continue to be harmed by Mexico’s unfair subsidies and illegal seasonal dumping,” Buchanan said when the bill was introduced. “This legislation will level the playing field for a vital industry to Florida’s economy.”

“Rep. Buchanan’s ‘Defending Domestic Produce Production Act’ equips our seasonal and perishable industry with a workable mechanism to address unfair trade practices,” Florida Farm Bureau President John Hoblick said in a statement. “A solution is long overdue, and it’s time we stand up for free and fair trade for our Florida farmers.”

“Those Mexican fruit and vegetable subsidies, often upwards of $200 million a year, have accelerated the modernization of Mexico’s produce sector at rates only large government monies can accomplish, unfairly enabling the Mexican industry to expand by a multiple of 52 since 2000,” Florida Fruit & Vegetable Association Mike Joyner added in a statement.

According to the UF/IFAS study, between 2010 and 2018, imports of tomatoes, strawberries, blueberries and bell peppers increased from 1.75 million to 2.32 million metric tons – a 33 percent increase, including 23 percent for tomatoes, 56 percent for bell peppers, 79 percent for strawberries and “a 34-fold increase for blueberries.”

In value terms, the study states, “imports of these commodities from Mexico increased from $2.16 to $3.76 billion, a 74 percent increase, including 38 percent for tomatoes, 91 percent for bell peppers, 169 percent for strawberries, and a 48-fold increase for blueberries.”

“Concurrent with the increased Mexican imports, production of some fresh fruits and vegetables in Florida has declined,” the UF/IFAS states. “Between 2010 and 2018, production value of [Florida] tomatoes, strawberries and bell peppers decreased by 58 percent, 22 percent and 27 percent respectively.”

In addition, the study calculates, in 2018 “the volume of vegetables in Florida that were not sold, presumably due to poor market conditions, nearly doubled from the previous year to over 90 million pounds, representing 2.7 percent of all vegetables produced.”

According to the UF/IFAS, the best case scenario should the USMCA be adopted is a 25 percent increase and the worst case is a 75 percent increase with 50 percent also included in calculations.

Under the 25 percent import growth scenario, total losses by Florida tomato, strawberry and bell pepper growers would be $88 million. Under the 50 percent import growth scenario, the UF/IFAS projects, losses by Florida growers would total $266 million. Under the 75 percent import growth scenario, losses by Florida growers would reach $389 million.

From the Center Square

Unfair Food Pricing is Killing Family Farms

In February, a dairy farmer friend sent me a note confiding that a few farmers she knows are living on cereal until their milk checks arrive.

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Yet, the recently released census of agriculture shows that the number of young farmers is growing even as the average age of farmers also increases, and there are uplifting articles about young Black farmers connecting with the land and enjoying the self-empowerment that comes with being an independent farmer.

Meanwhile, voices are rising about the central role that regenerative and organic farming can play in a Green New Deal, a program to mobilize all possible forces to prevent climate disaster.

How can we make sense of these conflicting currents? What policies and programs will create a just transition for family-scale farmers? What changes will enable farmers to maximize the potential of photosynthesis for putting carbon in the soil to supplement reductions in greenhouse gas emissions in mitigating climate disaster?

Farmers who are constantly worrying about financial viability have little bandwidth for new practices or long-term improvements that take initial investments. As Robert Leonard and Matt Russell noted in an opinion piece in The New York Times:

“Government programs like the current farm bill pit production against conservation, and doing the right thing for the environment is a considerable drain on a farmer’s bank account, especially when so many of them are losing money to low commodity prices and President Trump’s tariffs.”

The farm debt crisis of the 1980s never completely went away and has now resurfaced with a vengeance. In 2017, aggregate farm earnings were half of what they were in 2013 due to vast overproduction of basic commodities, and farm income has not recovered. The North American Free Trade Agreement resulted in the loss of mid-sized and smaller farms in all three signatory countries as integrated production and marketing favored larger farms.

Since 1950, the U.S. has gone from 5.4 million farms to just over 2 million, a loss of more than 3 million farms, with important shifts from many smaller integrated farms to fewer large, more specialized farms that grow even larger. For dairy farms in particular, these have been hard times as illustrated by the losses in the two top dairy states. New York State has lost 20 percent of its dairy farms in the past five years. Wisconsin lost 691 dairy farms in 2018.

While the persistence and shrewd maneuvering of organizations like the National Sustainable Agriculture Coalition and the National Organic Coalition meant that programs that support organic and sustainable farming fared remarkably well in the 2018 Farm Bill, the bulk of the more than 500-page bill carries on with business as usual, even making it easier for big farms to get bigger by failing to cap the payments any one farm can receive and allowing more relatives to cash in on programs in the bill.

Both mainstream parties advocate the neoliberal, free-trade policies that the ever more aggregated seed, food and chemical corporations have imposed upon the U.S. since World War II to the detriment of family-scale farms all over the world. The dairy farmers who got through the winter eating cereal and the new farmers who are eagerly starting out are in urgent need of radical change.

Why is this happening? Political economist and author Eric Holt Giménez would say this is just capitalism working as it is supposed to. Faced with slim margins in the race to cover farm expenses, farmers produce more, and that drives prices down even further. The beneficiaries are the ever-larger corporations that have consolidated their dominance in the food sector. The result? Shoppers pay more, and a shrinking portion of what they pay goes to farmers.

At first, this mainly hit conventional farms; then in 2017, organic processors started limiting the amount of milk they purchased from organic dairies and cut the price paid below the cost of production. As a result, family-scale farms of all kinds are going out of business, and tragically, there are increasing reports of farmer suicides.

Real Net Farm Income, 1929-2018 (Agricultural Economic Insights)

Median farm income and median total household income by ERS resource region, 2015 (USDA)

If you juxtapose the Agricultural Economic Insights chart with the United States Department of Agriculture (USDA) chart above showing the declining number of farms, it is clear that loss of farm income corresponds with the loss of farms. More than half of U.S. farm households lost money farming in recent years, according to the USDA, which estimated that median farm income for U.S. farm households was negative $1,553 in 2018.

Farm incomes have dropped despite record productivity on U.S. farms because oversupply drives down commodity prices. Through a plethora of racist policies, Black farmers have lost land at more than five times the rate of white farmers from the peak of Black farmland ownership in 1910 until the 1990s. Meanwhile, profits in consolidated food businesses (farm inputs, retail stores) remain high with returns on investment ranging from 8 to 35 percent. Clearly, there is plenty of money in food: It just does not get apportioned fairly to the people who do the actual work.

Programs to train new farmers, especially veterans, get media attention and funding, but as the National Young Farmers Coalition repeats tirelessly, land in most parts of the country is too expensive for a farmer to buy with farm earnings. USDA data show that farm families have a middle-class income, but only on the largest farms growing a few commodities is that income from farm earnings.

So, while presidential candidates and Green New Dealers are putting bold proposals on the table for public discourse, farmers, farmworkers and concerned eaters should take the opportunity to hammer out proposals that will solve the structural issues that have turned U.S. farming into a problem instead of the win-win-win solutions that are possible.

Declaring that she wants “Washington to work for family farmers again,” Sen. Elizabeth Warren promises to take some steps in the right direction by breaking up vertically integrated trusts, allowing farmers themselves to repair the equipment they purchase, ensuring that contracts for livestock farmers are fair, reinvigorating country of origin labeling, and restricting foreign ownership of farmland.

Sen. Bernie Sanders goes much further, outlining a program that would completely restructure the food system so that farmers can make a living and afford to pay living wages to employees. These are the policies this country needs if we hope to keep family-scale farming.

When farmers can afford to adopt regenerative organic practices, they will take more carbon out of the air and put it in the soil where it builds soil health, making the people and livestock who eat those crops healthier. The original New Deal’s parity pricing also fueled the soil conservation that ended the dust bowl.

Farmers can focus on carbon farming if the price they receive in the marketplace covers the costs of running their farms. Family-scale farmers and the people who want to eat locally grown food all need a fair Green New Deal for the 21st century.

From Popular Resistance. By Elizabeth Henderson, Truthout.org

USMCA grabbing the spotlight again?

Signed by Canada, Mexico and the U.S. more than seven months ago, the new Nafta agreement isn’t so new anymore. But it may be close to grabbing the spotlight again.

With the U.S.-China trade war on autopilot, the White House is shifting attention back to Nafta’s replacement — known as the USMCA — and more specifically how to get the pact approved by the Democrat-led House.

Not everyone in the Trump administration agrees on how hard to push.

On one side, Vice President Mike Pence’s staff and others are exasperated with the slow pace at which Democrats are demanding changes and offering solutions. Those officials see one way forward: force a vote on the revamped North American trade pact as soon as this month. Next Tuesday is the first day Trump can send the USMCA implementing legislation to Congress, starting the clock for lawmakers to take it up.

On the other side, officials including U.S. Trade Representative Robert Lighthizer don’t feel a particular urgency to ram a vote through  Congress. But his continued patience will require some clear evidence that Democrats are seriously engaged.

Congressional staffers caution that sending the legislation before Speaker Nancy Pelosi gives the green light would only cause delay. She wants to do minor surgery to the agreement before Democrats sign on. Too much stonewalling, though, might provoke Trump to give notice he’s withdrawing the U.S. from the existing Nafta. The U.S. traded more than $1.2 trillion in goods with its two closest neighbors last year.

Mexico has already ratified the pact, and Prime Minister Justin Trudeau has signaled Canada’s approval process is aligned with Washington’s. So the U.S. political calendar could dictate the next steps. With no end in sight for a deal with China, Trump will want to hail his U.S.-Mexico-Canada-Agreement as a major trade victory as he campaigns for re-election next year.

Jenny Leonard

Charting the Trade War

Switzerland exports more goods across the border to the southwestern German state of Baden-Wuerttemberg than to China. That’s something for Switzerland to consider as it remains locked in a dispute with the European Union over a political treaty.

 

From Bloomberg Terms of Trade- sign up here.