By Caitlin Cain & Paul Aucoin
This week in New Orleans, at Louisiana Trade Week, business leaders from around the nation will come together to discuss the importance of trade to Louisiana and the United States. In fact, because of shipping exports from the Mississippi River, international commerce is responsible for one in every five jobs in our state.
While trade advocates are convening in New Orleans to champion the state’s culture of trade, our leaders in Washington are debating the future of trade policies that directly benefit Louisiana. These include multilateral agreements like the North American Free Trade Agreement, a pact between the United States, Mexico and Canada, which is responsible for direct business growth in Louisiana. The leadership is also discussing the importance of Foreign Trade Zones — regions designated by our federal government as critical to supporting trade and the free flow of goods between nations.
While some may take issue with these trade agreements, we believe that international commerce is the foundation of our region’s economy and essential to the long-term well-being of Louisiana. Trade is also the bedrock of many smaller, rural economies in the United States.
For example, consider the American agricultural economy. Today, more than 30 states rely on the Mississippi River to export their grains globally. Nationwide, the U.S. exports some $135 billion in food and agriculture products each year. At a time when Washington is eager to create jobs, particularly in rural America, initiatives to help our nation’s farmers and ranchers grow exports is crucial. In the U.S. 1.1 million jobs are supported by agriculture exports, and for every additional $1 billion in exports another 8,000 jobs are created.
Another critical aspect of our country’s trade policy, also currently being debated on Capitol Hill, is the Farm Bill, which governs the way we grow, export, and consume food. Right now, Congress is working on a new Farm Bill to take effect in 2019.
The United States, in addition to feeding our domestic population, is increasingly cultivating fields to feed many global populations facing food deficits. The 2014 Farm Bill dedicated only $1.8 billion in spending to support international trade. This represents less than 0.5 percent of the total budget — a fractional amount compared to its economic magnitude as one in every three acres planted in the United States is exported.
As the current Congress considers the upcoming Farm Bill, it is essential they devote the necessary resources to both international trade and food aid. The trade component of the Farm Bill is particularly significant to Louisiana as our state is one of the largest agricultural exporters and maintains a $6.8 billion trade surplus in chemical and agricultural exports to countries such as China.
Our nation’s infrastructure policy is also something that must be addressed by Washington. In 2016, over $20 billion in agricultural exports were handled through Louisiana ports. Yet these shipments are threatened because the primary shipping channel on the river is not deep enough, and so many ships must operate with about one to five feet less of cargo. Each foot of cargo equates to a loss of around $1 million. Spread those losses over thousands of ships, and buying American grains like corn, soy, and wheat makes less economic sense for foreign consumers. Eventually, nations that import millions of tons of American grains may get their food elsewhere.
No question, if Washington can improve trade agreements and the terms for America, that would be welcome. But we urge our leaders to keep in mind that international trade is critical to our economy, and that should be reflected in our nation’s policy priorities. Whether that means improving our ports and logistics infrastructure, or securing access to international markets for our small businesses and farmers, it all benefits American workers.
Caitlin Cain is the CEO of the World Trade Center of New Orleans (WTCNO), a non-profit organization dedicated to fostering and promoting international business and trade in Louisiana.
Paul Aucoin is the Executive Director of the Port of South Louisiana, the largest foreign trade zone for merchandise received in the U.S., with $75 billion in cargo, and the number one Grain Exporter in the nation.