Darci Vetter grew up on an organic farm in Nebraska, and this experience helps inform the work she does today. “Agriculture is incredibly dependent on international markets,” she says, and Darci would know. She’s spent her career thinking about agriculture trade and global agriculture policy.
Beginning in 2014 under the Obama administration, Darci served as Chief Agricultural Negotiator at the Office of the U.S. Trade Representative, a Senate-confirmed Presidential Appointment with the rank of Ambassador. In this role, she was involved with the Trans Pacific Partnership, the United States’ agricultural package, and significant negotiations with Japan, China, Brazil and other countries. Currently, Darci serves as a Diplomat in Residence at the University of Nebraska Lincoln.
On his third day in office, president Trump withdrew the United States for the Trans Pacific Partnership (TPP) agreement. Darci sees this as a lost opportunity for the United States, specifically for American farmers. “It really would have been an opportunity for a country where 30% of our average farm income depends on exports, this [the TPP] was opening a lot of new markets for us—or had the potential to do that.”
“All farmers are exporters in one form or another, they just don’t always realize it because their transaction is usually down the road at the grain elevator, or at the processing plant to turn their animals into meat products. They don’t necessarily engage in the trade itself, but their products, or at least a portion of it, is almost always destined for an international market,” explains Darci.
Even with current heightened interest in eating local, agricultural exports in the United States are as important as ever. “I don’t think we should overlook the ability of the export market to provide added value for all sizes of farmers and a range of products,” says Darci. Clearer rules and more transparency in international trade of global agriculture products would make that trade for bigger operations is more efficient so that smaller operations can stay local or add their product to an export shipment just as easily.
Transcript: Rootstock Radio Interview with Darci Vetter
Air Date: March 12, 2018
Welcome to Rootstock Radio. Join us as host Anne O’Connor talks to leaders from the Good Food movement about food, farming, and our global future. Rootstock Radio—propagating a healthy planet. Now, here’s host Anne O’Connor.
ANNE O’CONNOR: Hello, and welcome to Rootstock Radio. I’m Anne O’Connor, and today we are talking with Ambassador Darci Vetter, strategic consultant working on international trade, food, and agricultural issues. Darci’s the former Chief Agricultural Negotiator at the Office of the U.S. Trade Representative. She currently serves as diplomat in residence at the University of Nebraska–Lincoln where she is working to launch the Yeutter Institute in international trade and finance. Welcome, Darci!
DARCI VETTER: Thank you very much. Pleased to be with you.
AOC: It’s great to have you here. So you have this perspective on food and agriculture that spans this really interesting scope, from growing up on an organic farm in Nebraska to now thinking about trade and policy from a global perspective. Can you tell us how you started in this realm?
DV: Wow, that’s a good question. You are right that I did grow up on this organic farm in the middle of Nebraska, and so have been very interested in agriculture and environmental issues from a very young age. But I also grew up in a family that spent a lot of time talking about the news and what was happening in the world around the dinner table, and so always sort of had the international policy, international issues bug as well and knew that I wanted to work on those issues. I just wasn’t quite sure how.
I ended up in a short-term assignment after graduate school at the Office of the U.S. Trade Representative, where I was supposed to be there on a temporary assignment to write an environmental review of the U.S. Chile Free Trade Agreement, and by the end of that process, six months in or so, found myself assisting with the environment part of the trade negotiation, and then stayed at USTR for about seven years because the work was so interesting, being able to marry our organic and our international policy on trade and economics, rather with our environmental policy. And I moved on to the agriculture office at USTR about halfway through that time and got to work on the agriculture negotiations as well as the environment part of our trade agreement.
AOC: So you were under the Obama Administration, and so when that administration leaves, so do all the appointed, people who are appointed by the president, they generally leave with the incoming administration. So now you’ve been watching for the past year, like all of us, as things have changed and become quite different under this new administration.
We know that the Trump administration has pulled out of, for example, the Paris Climate Accords, and he’s talking about also the Trans-Pacific Partnership agricultural package. I know you worked on that. There’s some sense that President Trump sometimes talks about the U.S. needs to get a better deal, or we are losing in trade and we shouldn’t be part of these agreements. What’s your perspective on these issues?
DV: Well, you are absolutely right that trade policy has taken a dramatic turn over the past year. The Trump administration has taken a very different approach, and for U.S. agriculture in particular I think it’s a big missed opportunity. I spent two and a half years, when I was the Chief Ag Negotiator at the U.S. Trade Representative, negotiating the Trans-Pacific Partnership agriculture package. And the TPP was a coalition of 12 countries that worked on and negotiated a trade agreement that would have increased trade flows between the United States, Canada, and Mexico, a number of countries in Latin America, and the Asia Pacific including Japan, and really reducing trade barriers among them.
And the agreement was important for a number of reasons, but for the Asia-Pacific in particular, that’s a really dynamic region with growing populations, growing percentage of those populations joining the middle class. It included first-ever access to very closed markets in Japan, which is a high-income, high-value market for U.S. ag products, and so really would have been an opportunity for a country where 30 percent of our average farm income depends on imports. This was opening a lot of new markets for us, or had the potential to do that. But on his third day in office, President Trump announced that he felt this was not a good deal for the United States and formally withdrew the United States from the TPP.
What we have seen since is the TPP 11—that is, all the countries except for the United States—continuing with their negotiations. They have announced that they are substantially completed in those negotiations and may go ahead and move forward to implement the TPP without us. That’s probably a very good thing for them—they were difficult negotiations, there were a number of countries that reached consensus on some high standards and access to markets, but of course it has the potential to really leave the United States behind.
If you think about, for example, that high-value market in Japan, if you look at the other countries in the TPP—Canada, Australia, New Zealand—they are our major competitors for that Japanese market. And instead of all of us getting access to Japan at the same time, now you would see the other countries going ahead. And so in areas like dairy, where Australia and New Zealand are major exporters and where Japan’s market has been very closed, the access we negotiated in TPP would go to those countries first. Canada and Australia and New Zealand actually compete with us for beef access, for example. Wine is a major and growing export from the U.S.; Australia and New Zealand are major exporters of those products too. And if their tariffs continue to go down while ours stay at that high level, it will obviously bite into the market share that the United States has into Japan and allow them to grow while we stagnate.
AOC: So you were saying that this is really an opportunity for farmers of all sizes to bolster their sales. Will that work for small farms, big farms, all farms?
DV: Sure. I think when you look at critics, not just of TPP but of the trading system in general, they have certain complaints about how different industries compete. And is this a trading system that just favors big corporate farms or large agribusiness or big companies in general, or can the small players, the small and medium-size businesses, compete? And I think that’s a really valid thing to look at. But I think there’s also two sides of good trade policy, and we only really debate about the rules in this piece of paper that we call these free trade agreements, and we spend very little time talking about the domestic side of the equation.
So what I’ve been working in for the last 15 years is international trade policy—that is, making the rules for how countries will trade with each other. What kinds of tariffs will be there? Can we can those down to zero? Can we make governments behave in a way that’s more transparent so that you know what rules and procedures you have to follow to be able to get your product into another country, and you can be certain that they’ll follow them and they’ll have your product meet the same standards as domestic product or product from a third country—they won’t treat you unfairly? And those are the things that we work on to say everyone should be treated in the same way. And you should know and have certainty about that, because it’s very hard for a business to participate in the global economy if the rules keep changing or if they’re not sure what they are.
But on the domestic side, that has to be met with a similar commitment to say that we are going to invest in our infrastructure so that our farmers can get their product to market, so that they can access the transportation and communication systems to be able to find out what opportunities are available and deliver their product. It means training our workers so that, as global demand changes or other countries begin to improve their capabilities, we can still compete or retrain our workers to be more competitive.
And this is a key part of the trade debate that our manufacturing base, the textile industry, other that have seen a lot of global competition, you hear all the time that globalization has not been good for them. But we could get rid of the international trade agreements. We could get rid of those rules that govern how trade changes, and it’s not going to prevent companies from still doing business overseas; it might just be in a less orderly way. So I think a lot of attention gets paid to are we doing enough in these international trade agreements, or are we creating rules that are useful? But I think we have to remember that just because the rules aren’t there, that doesn’t mean that the trade will stop.
And so the second part of this equation, making sure we train our workers well to be relevant in new global and more competitive economy, that’s just as important. And it continues to be important that then we tell those people what those trade rules are. How does a farmer or a small food processor in the middle of Wisconsin know how to access the Canadian market or the European market? Can they go to an easy place—one-stop shopping—and figure out the information? What’s the documentation? What are the standards they have to meet to take advantage of the opportunity to sell in the global marketplace? And I think there’s a lot of room for improvement in U.S. policy to really make sure that we are preparing our workforce to participate better.
AOC: Right, it’s so interesting because like it or not, international trade is here and is going to be here, and it’s going to continue to grow. But you’re right, also, to think about these, some farmers who may be not thinking about that global stage, right? And so you’re saying, in policy we have to be helping people understand that the world is changing and they have to change with it.
Which brings me to a question about the big domestic policy, which is the Farm Bill. And we are starting the Farm Bill conversations this year—they’ve been started, I guess, for a while now. I know you worked on the 2008 Farm Bill. Do you see these issues there? Are they coming up in this way? How has that changed with the changing conversation about trade?
DV: Well, it’s interesting to me that the Farm Bill, which is every five years we have a chance to revisit certain aspects of agricultural policy and the SNAP program, or our feeding program, here in the United States. And there’s a whole title of the Farm Bill called the “Trade Title,” but it actually deals very little with the underlying trade policy or our strategy for which countries we want to open markets with.
The Farm Bill and the Department of Agriculture deal more with promotion of markets and promotion of U.S. ag products overseas. And so what gets put in the Farm Bill is often funding for what we call the Market Access Program or the Foreign Market Development Program, where we partner with different agricultural groups—so the U.S. Meat Export Federation or the Poultry and Egg Export Council—to jointly market U.S. meat or U.S. poultry and eggs in other countries. And that can be direct promotion, sponsoring a U.S. pavilion at a big trade fair, or helping to do programs at an agricultural trade office at one of our embassies. But it can also be working with the members of those industries to say, what is the trade barrier you’re facing and how can we work with another government to be confident that our products meet their standards? Or, if a country is going to rewrite their food safety law, how can we work with them early on to demonstrate that U.S. products are safe and to make sure they don’t write it in a way that discriminates against U.S. procedures or the way that we run our inspection systems—things like that. Try to make our systems more compatible to facilitate the ability to trade.
So those programs are in the Farm Bill. I see strong support for continuing them. In some ways, even more support now, understanding that our ability to break down other barriers and to reduce tariffs through new trade agreements, that those aren’t moving forward right now, so our promotional efforts will be more important than ever. So I think those programs will continue and see strong support in a Farm Bill. But there’s not really the lever in the Farm Bill to deal directly with choosing which countries we try and do a new agreement with, for example. That happens more under different types of trade law, through the Finance Committee or the Ways and Means Committee rather than the Committee on Agriculture.
AOC: Now, I think, when people think about international trade, most generally don’t have a huge grasp on how our bananas end up on our store shelves or where our products go. And can you kind of help us just walk through, like how do things move in our economy, particularly in the agricultural sector?
DV: Sure. Agriculture is incredibly dependent on international markets—or U.S. agriculture is—and I think I had mentioned earlier that about 30 percent of U.S. farm income is directly linked to exports. And if you look at crops like soybeans, one in every three acres is exported. Something like almonds or cotton, we’re talking 80 percent of U.S. production that goes overseas. So if we don’t—
AOC: Wow, that’s a lot.
DV: It’s a lot, right! So if we don’t maintain or expand our access to new markets, that product builds up in the United States and you see a direct reflection in dropping commodity prices. And so all farmers are exporters in one form or another—they just don’t always realize it because their transaction is usually down the road at the grain elevator or at the processing plant to turn their animals into meat products. They don’t necessarily engage in the trade itself, but their product, or at least a portion of it, is almost always destined for an international market.
And even something like corn, where we export probably less than 20 percent of the corn itself, a lot of our corn is exported to feed to animals in other countries, but a lot of it is also exported as ethanol, as meat on the hoof. So when we export meat, we’re exporting corn and soy because that’s what we fed them with. So those markets are very closely intertwined and really dependent on being able to move our product overseas.
AOC: If you’re just joining us, you’re listening to Rootstock Radio. I’m Anne O’Connor. I’m here today with Ambassador Darci Vetter, strategic consultant working on international trade, food, and agricultural issues, and former Chief Agricultural Negotiator at the Office of the U.S. Trade Representative. Today we’re talking about all things trade, including domestic policy, and we are talking about what has changed in the landscape for trade and policy under the new administration.
So when you say 30 percent, what about a family farm with a hundred head of cow, you know, dairy farm, something like that, which we have a lot of in the Midwest here. What about their markets? Is that true for those markets or is that mostly domestic market?
DV: Well, I think there’s two ways to look at this. One is that those particular farmers may be selling directly to a more local processor whose products may stay in the local grocery store. But if a larger packer, for example, is playing in the export market and can’t move their product—when you’re talking about a commodity, when that product backs up onto the market, the price will drop for everyone. So whether your beef is going abroad or not, if the beef that used to can’t, then you’ll probably get a lower price for what you do produce. And so I think that’s important to remember.
I also think it’s important that when we do talk about agricultural trade—and I just gave you a number of examples—we do think about the bigger commodities: U.S. exports of beef, pork, chicken, and corn and wheat and rice and soybeans. Even if you’re dealing in specialty markets, there are huge opportunities overseas. And as consumers get more informed and wealthier and adopt a more Western diet, it’s also important in those specialty markets.
I think about my own family back in the ’80s when we were trying to make a go of it as farmers in the organic market, and there wasn’t a lot of market available in the middle of Nebraska for what we produced. And what got us through the credit crunch of the ’80s was the Japanese market for prize soybeans, that wanted our organic soybeans to make tofu. And so I don’t think we should overlook the ability of the export market to provide added value for all sizes of farmers and a whole range of products.
And it’s also true, you talked about our bananas and that we don’t think very much about eating strawberries in February and where those come from. The United States is also, in addition to being the biggest ag exporter, is the largest agriculture importer. And that has really changed our diet for the better. Americans eat a lot more fresh fruits and vegetables, and more fruits and vegetables overall, in whatever form, than we used to, now that we can get them year-round.
AOC: As I’m sitting in January in Wisconsin, I have to say I do think that strawberries are better in August, or June—end of June, July. But yeah, it’s remarkable what you can get in the middle of the winter from other places.
DV: That’s right. And we can send our surplus strawberries at the end of June to those places that have counter-seasonal production from what we do. I think what you also see is that when you could only get foods once a year, they were often very expensive at other times of the year, they were more of a special-occasion food. Now that we have these year-round markets, people incorporate them as part of their everyday diet. And so it’s changed our habits. But it also means that when products are in season and it’s U.S. producers filling the shelves for those products, they tend to sell more because people think about buying those products all the time as part of their staple diet. So trade can actually provide an opportunity for us to export, but imports might actually raise our domestic sales as well by creating that year-round demand.
AOC: And I think, too, that in addition to maybe being a healthier diet, because you can expand your—you know, variety is always healthier—but it also helps people understand different parts of the world. If you explore your food and where it comes from at all, or think about it, trade can open up different ways of seeing the world as well. Can you talk about how that can happen for us?
DV: Sure. I think that food is just such an important part of our experience and the way that we do understand one another. The way that we relate to or feel close to people is often over a meal. And I don’t think that will change anytime soon. I think that’s a common part of experience no matter what your culture is, even if the actual dishes and the ceremony around it is somewhat different. And because of that, sometimes these negotiations in agriculture can be very difficult because people have very strong cultural sentiments—I mean, it’s called agriculture for a reason—and wanting to sort of protect that place and that culture around food. But I think it also, as you say, sort of opens up opportunities to appreciate and experience what those countries have to offer. Certainly some of the best work or the deepest conversations that I’ve had with my counterparts about how trade will change agriculture in both our countries, and what our common goals are and how to get there, have often been over a meal, or in sharing the experience of seeing the agricultural areas of other countries so that I have an appreciation of the opportunities and the challenges they have to overcome.
But I also think that we talk a lot about—in this country, and it’s very true in other countries as well—that there are customers who very much want to eat local. And the idea of having a relationship with a farmer or a place is important. We like the story behind our food. And I think that’s more important than ever, and it creates opportunities for helping farmers and ranchers stay on the farm here in the United States by developing healthy and strong local markets. But it does create trade opportunities too.
And I particularly see an opportunity in using technologies, using the smartphone we all carry in our pocket, as a way to help document the story, and to ensure traceability and chain of custody and the kinds of quality control or certification measures that are being demanded but that, frankly, are kind of expensive and cumbersome for small producers to try to deal with. The more we can make all of that data line up in ways that are convenient and go to all the different places they may need to go to satisfy an organic certifier or a company-based standard, or a health and safety certificate at a border somewhere—if we can line those things up efficiently, then we expand the opportunity for the small farmer to take their product to the farmers’ market down the street or to add it into a load of products that might be going to China or India or Europe.
AOC: So that’s amazing—from the farmers’ market into international markets. Tell me about this group that you’re working with, the Farmers for Free Trade, and what’s their perspective on this. It’s really kind of mind blowing, right, that you can do both in one sweep?
DV: Yeah. So Farmers for Free Trade came together in part as a reflection on the changing language around trade and the U.S. role in international markets that we saw throughout the last campaign cycle. And I think perhaps we took for granted that there was a strong consensus that the United States was in fact the leader when it came to global trade, and that being active and engaged and having an open approach to international markets was a positive thing.
And then we went through this presidential election where we heard, from both parties frankly, that we were on the losing end of trade. And I don’t think the data really bears that out when it comes to U.S. agriculture, where trade has been beneficial. There’s certainly much we could to do improve and to spread the benefits of that trade and to work on sharing those benefits throughout the supply chain, and that’s very important. But if we take ourselves out of the game and we don’t focus on how to improve and expand those international markets or to make sure that the rules of international trade are more transparent and fair—things we sort of take for granted in the U.S. marketplace—then we’re going to place U.S. agriculture at a disadvantage.
And so Farmers for Free Trade was started and co-chaired by former Senator Max Baucus of Montana, former chair of the Senate Finance Committee, and former Senator Dick Luger of Indiana, who was the chair of the Ag Committee. So both elder statesmen of the Senate, a Democrat and a Republican, who looked at these changing attitudes around trade and said wait a second—we could lose decades of opportunity if we don’t work directly with farmers to help give them the data and the vocabulary and the ability at the grassroots level to really talk about how trade provides key support for rural communities.
And so that’s really what this is. It’s not in the beltway. It’s outside, in communities, working with farmers to say here’s why we support his positive approach to trade. Here’s how trade matters in the average pocketbook of farmers. Here are ways that we want to make sure the U.S. continues to lead in this space and not let other countries set the rules, or not let the system stagnate in a way that leaves behind U.S. farmers.
AOC: And, Darci, do you have a website that people could go and check out that group?
DV: It’s FarmersforFreeTrade.com.
AOC: Well, Darci Vetter, thank you so much for joining me today. It’s been great to hear your insights on trade and all things agriculture.
DV: Well, thank you. It’s a pleasure talking to you as always, Anne.
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