Global marketplace touches everyone's pocketbook

   When we hear news reports involving global markets, exports and imports, and foreign trade, most of us tend to shrug them off as issues that don't affect our business or us.
   The old phrase, "What's that got to do with the price of tea in China?" comes to mind.
   True, many people are not directly involved in global issues. However, events around the world have an ever-increasing impact on all our daily lives.
   Most of us can relate to the impact that decisions in the Middle East to restrict oil production have on gasoline prices here. We all feel the pressure when weather or political instability in a country that sells to us restricts those sales. Coffee from Colombia or grapes from Chile are examples, or bananas from Brazil.
   We don't produce these products in the U.S., so we're somewhat at the mercy of the trade policies and prices of those exporting countries. U.S. and Arkansas citizens all feel the pinch when other countries cut back on how much they buy from us.
   The recent Asian financial crisis is a classic example. The economies of several of our Far East trading partners have been/are reeling in recession. The value of their currency or their ability to buy our goods and services has been reduced substantially. Again you might ask, "So what?"
   The United States - and Arkansas - depend on selling products to foreign countries. And perhaps the industry most reliant on exports is agriculture. Fully one-third of Arkansas's agricultural production is exported. Arkansas farmers and ranchers are major suppliers of soybeans to Japan, cotton to South Korea, poultry to Russia, rice to Mexico and wheat to Egypt.
   How important is this? Well, without these and other export customers, one-third of our farms eventually would not be needed. Loss of these export markets would necessitate reducing production in the U.S. and would mean higher food costs for all consumers, not to mention the effect on jobs for people employed in support of agriculture or in food processing and delivery.
   Our ability to trade with foreign nations is fundamental to our economy. A host of issues must be addressed if we are to preserve these markets for our goods and the economic well being of most of our citizens.
   Increased globalization of our economy has brought new issues and concerns as we try to trade competitively and equitably with other parts of the world. To this end, the U.S. has joined other countries to establish preferred trading agreements, standards of conduct for international trade, and other "rules of the game."
   Many countries are members of the GATT (General Agreement on Tariffs & Trade); the U.S., Canada and Mexico have signed on to NAFTA (the North American Free Trade Agreement). The other major trade accord with which we are involved came only recently with establishment of the World Trade Organization.
   This group generally works to settle or mitigate disputes among trading partners.
   Agriculture particularly, and all business in general, faces several complicated and delicate world issues. They will force us to deal with the above-mentioned groups and agreements.
   A new round of trade negotiations will begin November in Seattle. All of the world's trading nations will be represented there as they attempt to modify trading rules. Several issues need to be addressed if the U.S. is to remain competitive in foreign markets. They include:
   • Export subsidies. Governments subsidize the price of their goods to make them more competitive. Our producers who rely on prevailing market prices can't compete well in that kind of trade environment.
   • High Tariffs. Some countries place a tariff on foreign goods to generate funds or protect domestic industries. Our interest here is in getting tariffs lowered and in better market access for our producers.
   • Non-Tariff Barriers. Trade-restrictive, they take many forms: health or sanitation requirements, grading or inspection standards, food-safety concerns.
   Arkansas farmers and ranchers are currently feeling the effects of these issues on several fronts. Europe has banned U.S. beef because we use growth hormones in cattle production. And the list goes on. At stake is Arkansas' $2 billion in export sales and jobs for all those who produce, process, distribute, market or consume food and fiber.
   While the business of agriculture deals directly with these matters, all of us are affected -even if we don't care about the price of tea in China!