Washington Insider-- Thursday

International Trade Support

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

ERS: Overall Food Insecurity Declined in 2015

Overall food insecurity declined in 2015 compared to 2014 for U.S. households, according to the Household Food Security in the United States in 2015 report from USDA's Economic Research Service (ERS).

The estimated percentage of U.S. households that were food insecure in 2015 declined significantly from 2014, to 12.7%, continuing a downward trend in food insecurity from a high of 14.9% in 2011. The 2015 prevalence of food insecurity was still above the 2007 pre-recessionary level of 11.1%. In 2015, the percentage of households with food insecurity in the severe range — very low food security — also declined significantly.

In 2015, 87.3% of U.S. households were food secure throughout the year. The remaining 12.7% (15.8 million households) were food insecure. Food-insecure households (those with low and very low food security) had difficulty at some time during the year providing enough food for all their members due to a lack of resources. The decline from 2014 (14%) was statistically significant.

In 2015, 5% of U.S. households (6.3 million households) had very low food security, down from 5.6% in 2014. In this more severe range of food insecurity, the food intake of some household members was reduced and normal eating patterns were disrupted at times during the year due to limited resources. This decline was also statistically significant.

Children were food insecure at times during the year in 7.8% of U.S. households with children (3 million households), down significantly from 9.4% in 2014. These households were unable at times during the year to provide adequate, nutritious food for their children.

The typical (median) food-secure household spent 27% more for food than the typical food-insecure household of the same size and composition, including food purchased with Supplemental Nutrition Assistance Program (SNAP) benefits.

About 59% of food-insecure households in the survey reported that in the previous month, they had participated in one or more of the three largest Federal nutrition assistance programs (SNAP; Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); and National School Lunch Program).

The last category could end up being an important component of the next farm bill debate and the nutrition programs that are the main part of that legislation.

G20 Leaders, Others Express Concern Over Anti-Trade Sentiments

More must be done to spread the benefits of global trade amid a rising trend of anti-trade sentiment in U.S. political discourse, according to leaders of the Group of 20 (G20) economies.

"We emphasize that the benefits of trade and open markets must be communicated to the wider public more effectively and accompanied by appropriate domestic policies to ensure that benefits are widely distributed," the communique issued at the close of the summit said.

The statement looks to head off critics who say trade deals are responsible for job losses and have done little to curb slow wage growth. One such critic, U.S. Republican presidential candidate Donald Trump, has zeroed in on trade as a key component of his campaign and has committed to renegotiate or withdraw the US from multiple international commitments.

Democratic presidential candidate Hillary Clinton has also sounded a negative tone on trade during her campaign, pushed in part that direction by the primary challenge she received from Sen. Bernie Sanders, I-Vt., Clinton has pledged to stop the Trans-Pacific Partnership (TPP) agreement and any other trade deal that disadvantages America.

"There was a determination around the world to better identify the benefits of trade, what the positives are in response to the rising populist backlash against globalization," International Monetary Fund Managing Director Christine Lagarde told reporters in a news conference following the G20 summit. "Also, there was a general sentiment in the room that it had to benefit all, not a few."

"Anti-globalization sentiment is growing, often manifested in strong views against trade," World Trade Organization (WTO) Director-General Roberto Azevedo said, adding "this is of particular concern, given the context of rising protectionism and sluggish economic and trade growth. So we must act vigorously."

Further, Azevedo said, "We need to correct misperceptions about trade in a credible way, by providing better education, better training and skills development, and adjustment support to the unemployed."

In a commitment to boost trade growth, G20 leaders reaffirmed their pledge to resist protectionism in all its forms and roll back their existing protectionist measures.

Washington Insider: International Trade Support

It was pretty startling at the beginning of this year's political debate to find all the major candidates pushing against trade agreements, and even trade in general. Considerable ink has been invested in suggesting what these positions might mean for support for agriculture's main source of market growth, as well as numerous other markets. However, the Washington Post is reporting this week that these positions may not be as popular as once believed, and certainly may not fully reflect broad voter beliefs.

The Post notes that both candidates have taken stands against unbridled globalization, but to somewhat different degrees, most notably Republican Donald Trump who shifted his party's standard rhetoric with his opposition to international trade agreements. Democrat Hillary Clinton has more subtly distanced herself from the 12-nation Trans-Pacific Partnership (TPP), the Post says, but still is highly critical of trade deals.

So it is another surprise that, despite the negative rhetoric during the campaign, a new poll from the Chicago Council on Global Affairs "appears to show an American public with some surprisingly positive attitudes toward globalization," the Post says. The Council found that some 65% of Americans said that globalization is mostly good for the United States while 34% see it as mostly bad, the Post reported.

"More remarkable still," the Post thinks, "those positive feelings could be found across the political spectrum: 74% of Democrats said globalization is mostly good, and even core supporters of Sen. Bernie Sanders, I-Vt., were mostly positive about globalization, the Post says."

On the Republican side, 59% said globalization is mostly good, although that number dropped to 50% for core Trump supporters. Also, 61% of independents said that globalization is positive, the Post reported.

Looking generally over a history of attitudes toward free trade and globalization, the Chicago Council's data seems to suggest that in the past 10 years Democrats have become more positive about free trade while Republicans have become more negative while Independents have largely stayed the same, the Post says.

If you found all this quite surprising, you would not be alone. But, but perhaps even more remarkable it the direction of the changes the Council found. It concludes that attitudes now "seem to be more positive toward trade than the 2016 election season rhetoric might lead you to believe," and that even the controversial TPP pact is largely supported. And the Council found that the TPP had "a fair amount of cross-party support, with 71% of Democrats in favor compared to 58 percent of Republicans and 52% of independents. Only 47% of Trump supporters said they favored the agreement," the Post said.

The Council suggests that American voters seemed to feel that trade was good for them personally as 70% reporting that "globalization made things better for them as consumers and 64% saying their own standard of living was improved by globalization. More generally, 59% of Americans said international trade was good for the U.S. economy and 57% said it was good for U.S. companies.

However, the Council found Americans less positive about international trade's effect on jobs. Just 40% said international trade was good at creating jobs in the United States, while an even lower 35% said it was good for American workers' job security. In both instances, Republicans were notably less positive than Democrats and Independents, although other demographic factors made little difference.

Well, the Post is correct that findings of the new poll contradict many of the common assumptions and proposals being offered during this debate. And the Council is not being bashful about its findings and has released a number of reports on these results, including in-depth looks at the views of supporters of both Clinton and Trump. So it is likely that the findings will be hotly contested.

Even if the study results hold up solidly, it seems unlikely that they will significantly change the focus of the current trade debates, nor the proposals being offered during the campaign. At the same time, they likely will be welcomed by the administration in its push for TPP approval later this year and could be used to counter those who hold that there is little prospect of winning that debate. This is an important aspect of the debate and one producers should watch closely as the political fights continue, Washington Insider believes.

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