Despite promise to “protect” them, trade spats are bad news for Washington farmers

It seemed, for a moment, like a bright spot on trade: A year after pulling out of the Trans-Pacific Partnership (TPP), President Trump suggested last week that the U.S. might rejoin the trade agreement. That was a welcome prospect for Washington farmers and others who are nervously watching other countries forge closer trade ties while they might be effectively locked out of important markets.

Talk of a U-turn didn’t last long, and President Trump quickly returned to his otherwise consistent antipathy to the TPP. It’s one of two broad trade issues in the U.S. today: Whether to spurn multi-nation trade agreements like the TPP, and whether to ignite a trade war with China. Washington State is particularly vulnerable on both questions.

I’ve said it plenty before, but it bears repeating once again: Our state absolutely depends on open markets, and a trade war would be bad news for Washington. Even if some industries or parts of the country think they’ll benefit from higher tariffs and import restrictions, Washington certainly will not.

A larger portion of our economy is based on exports than any other state, and that’s enormously positive. Washington makes products the world wants to buy, and that foreign trade supports an immense number of jobs on both sides of the mountains.

A trade war would mean layoffs and lower take-home pay in neighborhoods around the state – nothing to celebrate. Trade wars are retaliatory, and those caught in the crossfire are farmers, manufacturers, and many other types of employers.

The path to prosperity isn’t fewer exports and restricted markets
When President Trump flipped back to opposing the TPP, he said:

“But I like bilateral better. I think it’s better for our country, I think it’s better for our workers and I much would prefer a bilateral deal…We already have a deal with six of the 11 nations in the TPP. So we already have trade deals and the others we can make very easily.”

But bilateral trade agreements take time, even if the administration was focused on them (which it hasn’t been).

Farmers are increasingly nervous about being left behind. Trump sought to reassure them about a China trade war, ordering “a plan to protect our farmers and agricultural interests.” The only real reassurance, though, is access to markets. It is far better to sell farm products at a profit in international markets than to subsidize them domestically. And any response involving subsidies would create its own set of problems.

The prospect of many countries, including Canada, moving forward on TPP while our farmers are on the outside looking in is a worst-case scenario (just ask Washington wheat farmers – or for that matter, Canadian wheat farmers, who stand to benefit). Trade relations are built over time but destroyed easily. That was the problem during our West Coast port strike, and it’s the same problem when friendly nations view our political leadership as capricious on trade.

China issue and TPP are directly related
The Asian nations in the TPP, as well as China, are important markets for Washington farms. China buys a large portion of the Washington cherry crop, for instance. Demand for fresh fruit in Asia is rising with living standards. Those are markets we want to sell to – slow-rolling bilateral agreements one at a time is a poor strategy.

Commodity farmers everywhere have big concerns about this approach to trade. Restricting export markets can tank prices. For crops such as soybeans and wheat, the domestic market simply can’t absorb all we produce.

Many of the issues President Trump wants to confront regarding trade with China are legitimate ones. At the top, we need China to take intellectual property rights seriously, curtail industrial espionage and technology transfers, and respect the rights of all countries to navigate in the South China Sea. But that’s a long way off from saying an actual trade war would be a good idea.

Many are left wondering what the Trump White House’s trade strategy is. It’s unclear if the confusion is due to “strategic ambivalence” or just actual ambivalence. The president slammed both China and the TPP throughout the 2016 campaign, seemingly without realizing that the TPP is a geopolitical response to the China issue. One of its main purposes was to build further ties between the TPP nations and the U.S. rather than to China.

As on so many other issues, the administration’s trade policy seems whimsical – and not the good kind of whimsy. One tweet, one utterance can seem like a complete U-turn on an important policy. The next day brings another full U-turn. The Capital Press, voice of many Western farmers, asks, “Is this all part of an elaborate plan? Is there a plan? We can only hope.”
-Rob McKenna

The following two tabs change content below.
Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.