USW Study Shows Trade Agreement Impact On Ag

The U.S. Wheat Associates (USW) reported in a comprehensive new study, that bilateral and multilateral trade agreements directly increase U.S. ag exports, farm gate prices, and job growth, yet the U.S. risks falling behind its more aggressive export competitors.

Using analysis from several sources and econometric modeling, the study evaluated trade agreements between the U.S. and other countries and trade agreements independent of the U.S.

The Study Found That:

• Under the North American Free Trade Agreement (NAFTA), between 1994 and 2008 the value of U.S. exports of all commodities studied increased more than 300% or by more than $12 billion. Wheat exports increased from approximately $100 million to more than $1 billion, and feed grain export value increased by more than $3 billion.
• Under the Uruguay Round Agreement on Agriculture (URAA), the export value of all commodities studied also increased. In addition, world grain prices, soybean complex prices, and meat and dairy prices are 4% to 18% higher under the URAA than they would be without the agreement.
• Trade agreements with CAFTA-DR, Chile, Australia, Peru, and Morocco all pushed farm gate prices up, with the exception of soybean meal prices in one of those markets.

“With export volume increasing almost across the board, it is clear these agreements are creating greater profits and opportunities for U.S. producers,” said USW President Alan Tracy. “Unfortunately, the study also found that trade agreements between our competitors and other countries are cutting into our sales or threatening our market share.”