Elizabeth Warren’s Economic Nationalism

Economic nationalism and pandering to farmers are two classic parts of presidential campaigning. In this post by Senator Elizabeth Warren, she does both at the same time:

Advancing the Interests of American Farmers

Washington has also bowed to powerful foreign interests instead of standing up for American farmers. Congress repealed mandatory country-of-origin labeling for beef and pork in 2015 after a series of World Trade Organization challenges from Canada and Mexico, and it hasn’t established a new rule to protect American farmers. The result is that beef and pork can be given a US origin label if it is processed in the United States — even if the animals are not born and raised here. This misleads consumers looking for American-grown meat and undermines American beef and pork producers.

That’s why I will push hard for new country-of-origin rules for beef and pork — and use the trade tools available to me as President to push Canada and Mexico to accept them. These new rules will not only be good for consumers because they promote transparency, but good for independent American farmers, who are otherwise undercut by global agribusinesses passing off foreign beef and pork as American.

We also must stop foreign governments and companies from buying up American farmland. Foreign companies and countries like China and Saudi Arabia already own 25 million acres of American farmland. That’s about the size of Virginia. And one in four American hogs has a Chinese owner. That jeopardizes our food security, which threatens our national security too.

Iowa has the right idea. It passed a law prohibiting foreign individuals or entities from purchasing farmland for the purpose of farming. I support a national version of that law, and as President, will use all available tools to restrict foreign ownership of American agriculture companies and farmland. And I’m committed to stronger beneficial ownership laws so that foreign purchasers can’t set up fake American buyers to get around these restrictions.

Her argument about country of origin labelling and the World Trade Organization channels Donald Trump (“Washington has … bowed to powerful foreign interests”), but misunderstands the nature of the legislation/regulation at issue. Country of origin labelling requirements are not per se prohibited under WTO rules, but the rules do say that you can’t use them as a disguised means of protectionism, as was the case with the U.S. legislation/regulation at issue. My colleague Inu Manak wrote about the COOL legislation/regulation here, and she and I did a case study of the issue for this book. We explained that the trade problem was not the labelling requirement itself, but rather the structure of the particular legislation/regulation at issue, which created an incentive for meat processors to use domestic rather than foreign beef and pork. We also found a good deal of evidence in the legislative history indicating that protectionism, rather than consumer information, was the real purpose.

As for Warren’s reference to “countries like China and Saudi Arabia” buying up 25 millions acres of American farmland, that is a very creative use of the actual data. If you follow her links, you get to this explanation by the USDA:

Canadian investors own the largest amount of reported foreign held agricultural and non-agricultural land, with 28 percent, or 7,250,834 acres (report 1B). Foreign persons from an additional four countries, the Netherlands with 19 percent, Germany with 7 percent, the United Kingdom with 6 percent, and Portugal with 5 percent collectively hold 9,511,437 acres or 36 percent of the foreign held acres in the United States. The remaining 9,577,982 acres, or 36 percent of all reported foreign held agricultural and non-agricultural land, is held by various other countries.

But wait, where is Saudi Arabia in all of this? Her inclusion of a reference to that country seems designed to get people thinking about terrorism or human rights abuses, but here’s what is actually going on and it’s not all that scary: “Saudi Arabia and the UAE alone have acquired more than 15,000 acres in Arizona and Southern California to grow fodder for dairy cattle.” 

Warren’s attempt to appeal to economic nationalism is not surprising. But given recent polling showing that Democrats are more supportive of free trade these days, it might be smart if other Democrats took a different approach.