TRADE NEGOTIATIONS AND THE FUTURE OF AMERICAN AGRICULTURE

provided by Research Papers in Economics

TRADE NEGOTIATIONS AND THE FUTURE OF
AMERICAN AGRICULTURE

Leo V. Mayer and Wayne W Sharp
Foreign Agricultural Service, USDA

Until recently, international trade has taken a back seat to issues
of unemployment, inflation and the budget deficit. Now, however,
with the trade deficit almost as large as the budget deficit, opinion
polls show that the U.S. public is beginning to see trade as an impor-
tant concern.

Trade has been one of the primary interests of the Reagan adminis-
tration. The policies and programs resulting from this focus reflect a
strong commitment to free trade.

Basically, the administration believes that free trade produces
more jobs, more income, more production and a higher standard of
living for all. It accomplishes this through the process of increased
competition, and that often makes us think there must be winners
and losers. But that depends on your time frame. In the long run, all
contestants in an open trading system are winners. In the words of
John Stuart Mill: “The benefit of international trade is a more effi-
cient employment of the productive forces of the world.”

President Reagan recently issued a statement on agricultural trade
noting, “It has become clear that ultimately no one benefits from
the current policies employed around the world—not farmers, not
consumers and not the taxpayers. It is equally clear no nation can
Imilaterally abandon current policies without being devastated by
policies of other countries. The only hope is for a major international
agreement that commits everyone to the same actions and time-
table^,,(Reagan).

This philosophy has guided U.S. actions over the years. And, while
the world has not always agreed with us, history does show orderly, if
slow, progress toward the realization that trade barriers of any sort
undermine national interests and erode the potential to produce.

This philosophy also has led to the U.S. proposal for world agricul-
tural trade reform made before the General Agreement on Thriffs
and Trade (GATT) on July 6, 1987, in Geneva, Switzerland.

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