ManufactureThis is launching a Guest Column segment.  We’ll be inviting a wide array of participants (with diverse views) to share their opinions and expertise regarding trade policy and manufacturing in the United States.

For our first guest interview, we wanted to initiate a Q&A with Michael Stumo of the Coalition for a Prosperous America.  We’ll be conducting an ongoing interview with him over the next week or so. 

And so without further ado…

How did you get involved in trying to save U.S. manufacturing? 

  Michael Stumo:  I have been involved in production agriculture all my life.  Farmers and ranchers “manufacture” biological products - food and fiber.  I was an Iowa hog farmer, then a hog buyer for a farm organization trying to get higher prices for livestock through bulk/collective sales.  Then I went to the dark side and became a lawyer. 

A good part of my time in the last 10 years has been working to help farmers and ranchers gain fair, open and competitive markets in which to sell their crops.  The Organization for Competitive Markets is a nonprofit organization that focuses on this problem.  Farmers buy from monopolists and sell to monopolists, making it difficult to gain a profit.  They have no pricing power individually.  The dominant companies in agribusiness - Cargill, Tyson, Monsanto - promoted so-called “free markets” as an argument against reining in their ability to collude or unilaterally manipulate commodity prices.  It is noteworthy that the vast majority of price fixing cases brought by the Department of Justice in the past 30 years have been in agriculture.

The “free trade” issue is similar in that it is a false-hood, but a rhetorical tool to block progress in international trade.  Farmers have been told that most of their potential customers reside outside the U.S. and they have to open foreign markets to succeed.  But, as John Hansen of Nebraska Farmers Union says, we trade real access to our markets for theoretical access to foreign markets.  “Free trade” is a great label because you can’t be against free trade… can you?  The result has been agriculture’s $27B ag trade surplus in 1996 has not increased, but declined to about $4B in 2006.  The result is lost market share for U.S. farmers at home and many farmers having to leave the business.

Manufacturers face the same trend lines, toward deeper trade deficits.  Farmers and manufacturers have not worked together, though farmer and organized labor cooperation is not uncommon.  Farmers thought the manufacturers were all clamoring for the next “free trade agreement” and the manufacturers thought the same about agricultural producers.  Both were wrong.

We found common ground with organized labor, manufacturing and agriculture and decided to work together to make free trade smarter.  The U.S. has tremendous advantages and opportunities.  But we are unilateral free traders in a world of mercantilists.  We have approved trade agreements that codify disadvantages.  We drop our tariffs, and other countries raise border taxes.  We get rid of non-tariff barriers, and other countries subsidize their exports with currency misalignment.  We try to raise our domestic standards, and other countries cannibalize our domestic industries.

So farmers, manufacturers and labor have a common interest in pursuing a smart trade policy to regain the historic growth and prosperity of America, and avoid hollowing out our economy.

[To be continued]

**The opinions expressed by guest participants are theirs alone. 

##

This entry was posted on Friday, November 21st, 2008 at 1:40 am and is filed under AAM, Economic Security, Enforcing Trade Laws. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.