Citing World Bank research, Jon Huenemann, a panelist on a trade subsidies forum held at the University of Georgia’s School of Law Nov. 16, said global trade liberalization would result in a world income gain of more than $500 billion annually, of which some $390 billion would come from agriculture.
Those projections were not based on a particular time frame, Mr. Huenemann said, but rather on the impact of global trade liberalization given current economic forces, including the growth in trade with China.
China’s robust economy, which is a result of both “exports and imports that exceed any other economy of its size,” would play significantly in reaching those projections, according to Mr. Huenemann, senior vice president of Washington-based Fleishman-Hillard Government Relations and a former assistant U.S. trade representative.
“Because of this dramatic growth and the increasing openness of its economy, China and its 1.4 billion people is an increasingly important locomotive for economic growth globally,” he said.
Georgia Agriculture Commissioner Tommy Irvin, in opening remarks, emphasized the opportunity that lies ahead for Georgia farmers with cotton exports to China.
“Since we’re the second largest cotton producer in the U.S., it’s important to our cotton farmers that we get our hands on that market,” he said.
Speaking to GlobalAtlanta in a telephone interview afterward, Mr. Irvin said, “With the new [World Trade Organization] rules that take effect next year, we have to make sure we have a good relationship with China.”
Given that Georgia ranks second only to Texas in U.S. cotton exports, “Anything that affects shipments from the U.S. will help the marketplace in Georgia,” he said.
China, which doesn’t grow enough cotton to support its apparel manufacturing industry, purchased more than 4.9 million bales of cotton from the U.S. from Aug. 2003-July 2004, said Gary Adams, chief economist for the National Cotton Council.
Mr. Huenemann and his fellow panelists, however, addressed the difficulty of resolving trade issues, such as domestic subsidies, tariffs and market access, which impede global trade liberalization.
While David Frederickson, president of the National Farmers Union, spoke to farmers’ increasing skepticism about the benefits of globalization, Bob Stallman, president of the American Farm Bureau Federation, said that ignoring globalization of the agricultural marketplace is no longer an option.
American agricultural productivity increases on average more than 2 percent annually, he said, while domestic consumption increases less than 1 percent
“The consequences of not expanding markets for U.S. agricultural products are lower prices for farmers and increased dependence on government programs,” Mr. Stallman said.
In agreement, Mr. Huenemann said, “Economic openness, according to the World Bank and virtually all other credible centers of economic research, is an essential ingredient for economic success, and something for us all to keep in mind.”
The forum, entitled ” Agriculture and the WTO: Subsidies in the Cross Hairs,” was a collaborative effort of the Dean Rusk Center at the University of Georgia’s Law School and UGA’s College of Agricultural and Environmental Sciences.
For more information, go to the National Cotton Council’s Web site at www.cotton.org.