Alan Guebert: The ‘level playing field’ of trade
December 10, 2010
Some phrases just make the heart flutter. “Call the vet,” was one that always tripped my father’s ticker. “Level the playing field of trade,” has the same effect on me.
Level the playing field of trade.
Hmm, is it a negotiating strategy, a goal, an ideal?
Wait a second; don’t I want an unlevel field so I can run downhill?
A telephone call from a Nebraska cowboy offered me insight to the “level playing field” notion. At an ag meeting with that state’s former football coach and then-congressman Tom Osborne, the rancher related, Osborne repeatedly talked about “how we need to level playing field in trade.”
After the 10th mention, the rancher broke in. Coach, he asked, when you and Bob Devaney were winning all those games in Lincoln weren’t scholarships mostly unlimited until the NCAA capped ’em at something like 85 players in the late 1990s?
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Right, nodded Osborne.
By then, though, the Huskers won five national football titles and came close on two or three more, right?
Yep, nodded Osborne.
So, the rancher asked, after the NCAA “leveled the playing field” for all football teams by setting limits on the number of players each could have, how many national titles did Nebraska win?
The answer was – is – clear, none.
Clear, too, was – is – the rancher’s point: When nearly every ambulatory male between the ages of 18 and 22 in Nebraska could play for Huskers, the field tilted heavily in the team’s favor. When the NCAA leveled it by capping player numbers, Nebraska’s advantage disappeared.
The same result can be seen after 15 years of “level” playing between the U.S., Canada and Mexico under the North American Free Trade Agreement. In a league once dominated by America, NAFTA now bleeds the U.S. of jobs and money.
In agriculture, NAFTA and domestic farm policy combined to tilt the playing field in favor of agribiz, especially so for meat integrators, writes Timothy Wise and Betsy Rakocy of Tufts University in a report titled “Hogging the Gains from Trade,” published in January 2010 by Tuft’s Global Development and Environment Institute.
In fact, notes the report, Freedom to Farm (F2F), the market-shattering, budget busting 1996 Farm Bill – that saw acres in “program” crops expand by six percent, crop prices fall 40 percent and program costs “increase from their pre-1996 levels of $10 billion per year to around $20 billion per year” – was to complement NAFTA by further leveling the field.
Instead, for example, note the authors, it leveled hog producers, most who where never seen again.
When Wise and Rakocy focused on Smithfield Foods, the world’s largest pork producer, they found that U.S. farm and trade policy delivered Smithfield several windfalls in the 10 years after F2F.
First, the Farm Bill so cheapened grain prices that Smithfield saved $2.54 billion on feed for its livestock. The cheap feed meant lower production costs which, in turn, boosted U.S. pork exports to Mexico 700 percent over the same period.
Meanwhile, U.S. corn exports to Mexico “quintupled from their levels in the early 1990s while soybean imports (to Mexico) jumped more than 150 percent” to fuel a large, rapid expansion by Smithfield into Mexican hog production.
Where did that meat go? Much of it went downhill, of course: to the U.S.
And now comes the U.S.-Korean Free Trade Agreement. According to news reports, the U.S. International Trade Commission estimates this deal will boost U.S. economic output “more than the United States’ last nine trade agreements combined.”
Now there’s an endorsement of free trade and level playing fields if I ever heard one.
‘Course that just could be my heart fluttering, too.
© 2010 ag comm