Why Trade Matters

Why Trade Matters To Agriculture – And The World

The U.S. Grains Council (USGC) believes that open, liberalized trade of all goods and services is vital to the prosperity of the world economy.

With more than 95 percent of the world’s consumers living outside the United States, world markets offer momentous growth opportunities for U.S. agriculture.

Export markets for U.S. agriculture have shifted over the years from Western Europe and Russia to Latin America, North Africa, the Middle East and East Asia. Now, an emerging middle class in countries including China, Vietnam, India, Bangladesh, Malaysia, North Africa and Indonesia is creating new opportunities.

This increasing prosperity, combined with continuing population growth, means consumers worldwide over time will tend to consume more meat, dairy, eggs, fish, fruits and vegetables and less cereal grains. The next 30 years will offer great opportunity to expand agricultural trade to support greater demand growth for these high-protein foods.

With the most modern, innovative and productive agricultural system in the world, the United States enjoys a longstanding and significant comparative advantage in agricultural trade. As a shining star of U.S. international trade, agricultural exports are increasing profitability for farmers and creating economic activity in rural communities across the country.

The United States has negotiated trade agreements with 20 countries since the end of World War II, including that which established the World Trade Organization. In calendar year 2016, U.S. agricultural exports to these countries account for 38 percent of total U.S. agricultural exports, according to USDA data.

These numbers make it clear why agriculture is the U.S. foreign trade champion. Agricultural exports are vital to the nation’s economy and the balance of payments. They also show why the U.S. government must develop a clear, consistent export policy that responds to changing international market needs. Failing to move forward on trade means falling behind.

The Council understands as well that international trade is a powerful tool for enhancing the food security of all peoples by allowing them to take advantage of the safety net that trade assures and to meet the rapidly increasing demand for greater quality and variety from a rapidly growing global middle class.

Trade enhances consumer choice, provides access to greater variety and higher quality foodstuffs, and permits countries to shift production to areas in which they enjoy a competitive advantage and can earn a greater return.

When trade works, the world wins!