Connection Spring 2017 | Page 24

TRADE a key player in

ag economy

With trade suddenly a hot topic among Americans who usually may not question where their consumer goods come from — or where their agricultural goods go — a few background facts offer important context . For agriculture , the fact is that trade has served the U . S . very well .

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Courtesy of U . S . Grains Council
One of the most important issues to many Americans — and rightfully so — related to trade is the impact on our pocketbooks . Critics of trade are often quick to warn that an expansion of trade could significantly drive down wages . But the numbers tell a different story .
In fact , the U . S . has 20 free trade agreements with countries that account for 10 percent of the global economy . Yet these deals are the basis for nearly half of America ’ s exports .
American real incomes are nine percent higher ( or approximately $ 1.5 trillion more ) than they would otherwise have been as a result of U . S . trade liberalizing efforts since World War II , according to the Peterson Institute for International Economics .
And though technology has dramatically changed the manufacturing sector , the U . S . share of global manufacturing has held at 20 percent for 40 years , and U . S . manufacturing output has actually quadrupled since 1980 , in large part spurred on by exports made possible by trade agreements , according to a U . S . Department of Commerce study .
The positive impact of grain trade on farmers ’ finances and the larger economy is also indisputable .
Exports of U . S . corn and corn products generated $ 74.7 billion in annual economic output in 2014 , with overseas sales of all U . S . feed grain products contributing $ 82 billion , according to an analysis conducted by Informa Economics .
All feed grain products — a group that includes corn , corn products , sorghum and barley — contributed an increase to U . S . gross domestic product ( GDP ) of $ 33 billion over what would have otherwise occurred , affecting 371,536 jobs .
The same study found that every $ 1 in exports of grains and grain products generates an additional $ 3.23 in business sales across the U . S . The positive economic effects of grain exports benefit not only agriculture , but also wholesale trade , real estate , oil and natural gas production , and the banking and financial industries , so these results can be seen in every state across the nation .
On the other hand , if these exports were suddenly halted , more than 47,000 jobs and $ 2.8 billion in GDP would be lost in the farming , ethanol production and meat production industries alone , according to Informa .
Coming to the table with trading partners whose citizens represent 95 percent of U . S . agriculture ’ s global customers is important to opening new opportunities and making sure that foreign governments that don ’ t play by the rules are not given an advantage over U . S . workers and businesses .
Trade negotiations give our farmers and workers a fighting chance in this skewed arena .
The facts are clear : trade has served America well , and new and expanded trade agreements will be integral to improving economic growth for the agriculture sector and rural economies .

$ 1.5 TRILLION INCREASE IN REAL INCOMES BECAUSE OF LIBERALIZING TRADE EFFORTS SINCE WWII Peterson Economics

$ 82 BILLION ANNUAL ECONOMIC OUTPUT IN 2014 BECAUSE OF EX- PORTS OF FEED GRAINS AND GRAIN PRODUCTS Informa Economics

371,536 NUMBER OF FULL-TIME EQUIVALENT JOBS LINKED TO GRAIN AND GRAIN PRODUCTS EXPORTS IN 2014 Peterson Economics