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Yeutter talks trade

Gil Gullickson 03/07/2011 @ 12:34pm Crops Technology Editor for Successful Farming magazine/Agriculture.com

Remember Clayton Yeutter? This is a pop quiz for those of you who started farming in the mid-1990s. You may not remember the former USDA Secretary who served from 1989 to 1991.

For those of you who do, Yeutter made foreign trade his mission at USDA. Trade is still on the mind of the Republican from Nebraska. He gave a trade update at Bayer CropScience’s 2011 Ag Issues Forum during March’s Commodity Classic in Tampa, Florida.

Yeutter chided the Obama administration and Congress for not ratifying trade agreements with South Korea, Columbia, and Panama. “There has been a vacuum in trade policy in the last 2 years,” says Yeutter.

He adds the George W. Bush administration did not present them for ratification to the then-Democratic Congress due to labor union influence.

“A lot of people in the trade community felt that once the (2008) presidential election was done, when there is a bit of a honeymoon period, that it would have been an excellent time to move it through Congress,” he says. “But the Obama administration wanted to concentrate on the stimulus and health care. Trade moved to the back burner.”

Yeutter sees positive signs, though. President Obama recently stated he wants to boost U.S. exports. One hurdle, though, is Congress wanting to alter trade agreements with South Korea, Panama, and Columbia, says Yeutter.

“Every time is gets tweaked to satisfy labor unions, the bar gets raised, and we tweak it again,” says Yeutter. “At some point, we have to stop tweaking it and present it to the U.S. Congress. From the standpoint of U.S. agriculture, we are losing sales every week.”

Yeutter sees benefits for the Trans-Pacific Partnership free trade agreement being negotiated between the U.S., Australia, New Zealand, and several South American and Asian countries.

“The big gorilla in this is Japan, and whether it joins the negotiations,” says Yeutter. “There will be additional demand for U.S. ag products if that market opens up. Clearly, it is in our interest to have them in. What is difficult is they don’t want to (trade) liberalize their agriculture.”

There is precedent for reforming trade in a difficult market—the European Union’s Common Agricultural Policy (CAP).

“We had been pounding on them for years and years to change,” he says. “The answer we always got it is it is sacrosanct policy, it will never change. But they have reformed it substantially in the past 15 to 20 years.”

Yeutter thinks trade liberalization could benefit the U.S. dairy industry.

“The U.S. dairy industry has traditionally tilted protectionist in its viewpoint,” he says. “That mentality needs to flip 180 degrees, and the sooner, the better.

“Dairy export opportunities are exciting,” he adds. “The reason is the growth in incomes. In Asia, in particular, they are causing the demand for imported dairy products to rise so fast they (current exporting countires) can’t keep up with it.”

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