Trade agency merger could affect California ag exports

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In his State of the Union address, President Obama requested new powers to force a consolidation of government trade agencies under a yet-to-be-named new department. Agricultural interests immediately railed against the plan, which sought to subsume the USDA’s Foreign Agricultural Service (FAS) and the United States Trade Representative (USTR). Since that time, the proposal has changed slightly, leaving out any mention of FAS. This has not eased concerns for food exporters who are experiencing boom-times in California. Nationally, the ag industry says that it would be a mistake to mix the business of commercial and industrial exporters with agricultural components of foreign trade.

Delta Farm Press reports that a coalition of agricultural and commodity organizations are expected to send a letter to the White House next week expressing their concerns over the merger. Agencies included in the proposed merger are the Export-Import Bank, the Overseas Private Investment Corporation, the Trade and Development Agency, the Small Business Administration, the USTR, and some functions of the Commerce Department.

The White House says the reorganization and consolidation scheme will save the federal government $3 billion over ten years and will mean the end of 1,000 to 2,000 government employee positions. Critics say the estimated savings are a drop in the bucket compared to the deficit and that the reform, coming in an election year, is more about the appearance of cutting government than actually streamlining the bureaucracy.

Dave Salmonsen, senior director of Congressional Relations for American Farm Bureau Federation (AFBF), told the Press that AFBF representatives along with other ag groups met with the Office of Management and Budget (OMB) last June. The OMB was put in charge of handling the particulars of the consolidation, says Salmonsen.

“We sent a letter recommending against the proposal to fold FAS and USTR into some larger trade agency,” said Salmonsen. “We didn’t think the missions that deal with agriculture have much in common with the Department of Commerce and wanted to keep them separate.”

The office of the USTR is especially important in negotiating WTO and minimal access issues for agricultural exports. If the proposed merger goes through, industry insiders fear the credibility of the USTR would diminish among foreign trading partners. For commodity and specialty crop exporters, the issue comes down to the importance of maintaining the USTR’s autonomy within the Executive Office of the President.

By functioning as an independent office, the USTR balances divergent trade interests, while advocating the reduction of trade barriers, according to a recently released statement by the American Soybean Association (ASA).

“USTR’s efforts have been vital to the growth of American agricultural exports. We are concerned that folding USTR into a massive Department of Commerce or Industry structure would significantly weaken the coordination role played by USTR on trade interests across sectors, and the work on agricultural trade opportunities and barriers would be diminished. We therefore support continuing the current structure and functions of the Office of the U.S Trade Representative,” says the ASA.

Washington representative for ASA Lorena Alfaro said, according to Delta Farm Press:

“Considering the current global economic conditions, this is not the time for U.S. trade policy to be under a commercial or industrial agency. Agriculture in particular has a great track record in terms of boosting the U.S. brand abroad.”

Alfaro points out that soybean exports have nearly doubled in the last 10 years — an impressive feat, which is partly due to USTR’s diligent work in eliminating trade barriers, opening foreign markets and negotiating Free Trade Agreements (FTAs), he told the Press.