Trying to Tackle the Ag Trade Deficit
At a recent hearing before the Senate Committee on Finance, South Dakota Republican John Thune complained to Biden Trade Ambassador Katherine Tai that the White House refusal to boost market opening trade deals is harming producers.
“We’re running the largest trade deficit this year, ever- $17 billion this year. They’re saying it could be $30 billion this coming year. And net farm income was down $30 million last year and will be down they say, $39 billion this year. So, thanks to inflation, input costs are going up, and commodity prices are going down. One of the things that affects commodity prices is demand. And the way you create demand is to open markets. And I can’t tell that the administration is doing anything on that.”
Tai argues that some like the UK and EU don’t want to do Ag deals, and free trade agreements don’t boost demand fast enough. She cited $21 billion worth of Ag market gains over the past three years in Japan, India, and other countries, what she called “singles and doubles” as opposed to trade homeruns like free trade agreements.
She insisted some of the deficit is due to a strong US economy and dollar.
“I think our farmers are the savviest businesspeople that I talk to and work with in trade. They know their businesses; they know trade. With respect to the deficit, we’re concerned about the deficit. Absolutely… I just wish that our ag champions were as concerned about the industrial trade deficit as they are with ag trade because it can absolutely indicate a need for concern. Secretary Vilsack and I know, along with our farmers, that we need to be able to diversify our export opportunities. Because we are at a lot of risk. We are working very, very hard to do that.”
Thune expressed that while their approach is grounded in things other than market access, market access is what American farmers want and need to get farm income back in the plus column.
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