Dotectionism 9 could hurt U.S. farmers
ITHACA. NY Congressional
efforts to ptotect U.S. industries
from foreign competition could
backfire on American farmers,
particularly those in the Midwest,
two Cornell University
agricultural economists are
warning.
Kenneth L. Robinson and David
Blandford a, ’•ee that major grain
and soybean importing countries
such as Japan, Korea, and Taiwan,
as well as the European Economic
Community, probably would
retaliate against strong U.S. trade
protectionist measures by im
porting more agricultural products
from competing exporters, such as
Canada, Argentina, Australia, and
Brazil.
Robinson and Blandford are
members of the faculty of the New
York State College of Agriculture
and Life Sciences at Cornell.
“We would like to reduce our
trade deficit with Japan and other
countries,” Robinson says.
“However, if other countries
retaliate agamst us, this could pose
a major problem for our farmers.”
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Countries such as Japan,
Taiwan,, and Korea now account
for a substantial volume of
agricultural exports. Japan alone
is the biggest customer for U.S.
agricultural products.
When it convened for its fall
session this year. Congress faced
more than 500 bills dealing with
trade protection. Trade protection
measures that are being con
sidered are varied; they include
the imposition of stiff import
tariffs or quotas, export subsidies,
and new health or labeling stan
dards, among other measures. To
date, no strong protection
measures, have been enacted
because of opposition from the
White House.
Many people argue that
proposed protection measures
would give embattled American
industries a boost, Blandford
points out. Such measures,
however, could trigger foreign
retaliation, much like the “trade
wars” of the 19305.
One of the principal targets of
the trade protectionist movement
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is Japan, whose $37 billion trade
surplus with the U.S. in 1984 was
the largest among the U.S. trading
partners.
In 1984, for example, Japan
bought $6.8 billion worth of U.S.
agricultural goods, representing 18
percent of this nation’s
agricultural export market. A
boycott of U.S. agricultural
products by Japan alone would
have a major impact on American
farmers, Blandford says.
Both Blandford and Robinson
agree that the effectiveness of a
boycott of U.S. agricultural
products depends on the
availability of similar products
from other exporters.
“It depends on whether or not
adequate supplies are available
from competing grain exporting
countries, and I think there are,”
Robinson says.
If such a retaliation did take
place, farmers in regions such as
the Midwest and South would be
hurt the most, because these
regions produce the bulk of
American agricultural export
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products, such as grains,
soybeans, and cotton, Robinson
explains.
In regions such as the Northeast,
farmers would not be hit as hard
because only a small proportion of
their production is exported,
Robinson says. New York farmers,
for example, are major producers
of dairy products, vegetables, and
fruits.
“Agriculture in New York State
is less export-oriented, so it’s less
vulnerable to protectionist
measures than crops in the South
or Midwest,” Robinson notes.
U.S. grain is already being
displaced in the world market by
exports from other countries,
whose agricultural outputs are
increasing as they adopt modern
farming technologies.
“We’re losing our share of the
world grain markets,” Robinson
points out.
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For example, in 1979, U.S. grain
accounted for about 59 percent of
the world market. In 1962, that
market share dropped to 42 per
cent, and is expected to drop below
40 percent in 1985-1986, according
to Robinson.
At the' same time, grain
production in other countries has
increased dramatically in recent
years.
"The European Economic
Community has more wheat than
they know what to do with,”
Robinson notes. “As a result, they
are cutting prices on world
markets. And of course, the strong
U.S. dollar makes our com
modities more expensive than
those from other countries.”
Both Blandford and Robinson
doubt that strong protectionist
measures in Congress will ever
appear on the law books, because
President Reagan has vowed to
veto them.
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