By John Hood
RALEIGH — While some economic metrics continue to offer good news to North Carolinians, others point in a different direction. U.S. agricultural exports, for example, fell by $17 billion last year and appear to be on track for another decline of about $8 billion or so this year.
As U.S. Sen. Thomas Tillis and 21 of his colleagues pointed out in a letter to key Biden administration officials, some fluctuations in export markets are inevitable, the result of currency flows and international factors beyond the control of any one country or set of policymakers. But this two-year decline in ag exports sticks out like a sore thumb.
Tillis and the other farm-state senators argued it was “directly attributable to and exacerbated by an unambitious U.S. trade strategy that is failing to meaningfully expand market access or reduce tariff and non-tariff barriers to trade.”
For decades, they pointed out, leaders of both political parties had made it a priority to expand overseas markets for agricultural products and other goods and services. They “accomplished this feat through negotiations of actual free trade agreements, removal of technical barriers to trade, and holding our trading partners accountable to their commitments,” the senators wrote. They urged U.S. Trade Representative Katherine Tai and U.S. Department of Agriculture Secretary Tom Vilsack to pursue a similar course today.
They’re right, of course, but such policies are a hard political sell at the moment. Both Joe Biden and Donald Trump have a history of indulging populist opposition to trade agreements. Partly following their lead, an increasing number of Democrats and Republicans in Congress seem less inclined to vote for international agreements that lower barriers to our exports abroad (and also, by happy necessity, lower prices for consumers here at home).
Whatever the consequences may be for other sectors of the economy, a continued turn away from free trade will wreak havoc on agriculture, forestry, and related industries that rely heavily on export markets. According to North Carolina State University economist Mike Walden’s latest analysis, the production and sale of food, fiber, and forestry products generate more than $100 billion in economic impact, accounting for about 16% of our state’s gross domestic product. The sector employs nearly one of every five North Carolina workers.
Our largest ag exports include meats, tobacco, soybeans, grains, and fresh vegetables. North Carolina firms constitute America’s largest exporters of broilers and tobacco. We rank third in pork exports, seventh in cotton and wood-product exports, and ninth in the production of softwood lumber.
The livelihoods of many North Carolinians — and thus the economic and fiscal health of many North Carolina communities — depend on the expansion of international trade, not its contraction.
In an American Enterprise Institute study published last fall, AEI fellows Barry Goodwin and Vincent Smith observed that when the administration of former President Trump imposed tariffs and other restrictions on America’s trading partners, they retaliated by erecting barriers against our exporters. Instead of repealing his predecessor’s policy mistakes, President Biden has doubled down on them.
Chinese restrictions against imports of soybeans and other agricultural products were especially painful. As Goodwin and Smith point out, Washington responded not by ratcheting down trade tensions but instead by doling out federal dollars to agricultural enterprises. “Many of these subsidies were poorly targeted,” they write, while even deserving farmers would have been better served by restoring their export markets, not paying them subsidies.
Are there legitimate concerns about trading sensitive technologies and defense-related products with the Chinese, the Russians, and others who wish harm on America and our allies? Certainly. Tillis and the other senators aren’t denying the need to take national security into account when fashioning trade policy. What they’re calling for is a default policy of free trade with free people in pretty much anything, along with opening export markets around the world for such products as pork, wood pulp, and soybeans.
That would be good for America. It would be particularly good for North Carolina.
John Hood is a John Locke Foundation board member. His latest books, Mountain Folk and Forest Folk, combine epic fantasy with early American history (FolkloreCycle.com).
