January 18, 2019


Globalization Is Surviving Trump:  European and Asian countries are doubling down on economic cooperation. (Shawn Donnan, January 18, 2019, BLOOMBERG BUSINESSWEEK)

Kevin Kester is used to taking the long view--his family has raised cattle on the land his Bear Valley Ranch occupies in California since 1867. But he also can see what looms in the not-too-distant future across the Pacific Ocean.

The 11-country trade deal once known as the Trans-Pacific Partnership has started to come into force, giving his Australian competitors what stands in coming years to be an increasingly valuable leg up in Japan, the U.S.'s most lucrative export market for beef. Thanks to President Trump's withdrawal from the TPP--one of his first acts in office--American ranchers won't get any of the benefits of the reduced tariffs for beef and other farm products U.S. negotiators spent years haggling over with Japan, the pact's biggest remaining economy.

Kester isn't just another bemused bystander to American politics. As the current volunteer president of the powerful National Cattlemen's Beef Association, he serves on committees that advise Trump and his cabinet on agricultural policy and trade. He doesn't see Trump reversing course and joining what's now known as the CPTPP (the "C" stands for comprehensive and the "P" for progressive, a rebranding requested by Canada's Justin Trudeau) anytime soon. His advice to the government: Please hurry up and negotiate with Japan so U.S. beef doesn't become another economic casualty of the president's trade wars. "We're encouraging them to get on the horse and get working on the bilateral with Japan as soon as possible," he says.

Kester's plea echoes an emerging theme among U.S. industries going into 2019. While plenty of corporate angst is focused on tariffs and the president's China battles, many businesses are more concerned about protecting their share of other offshore markets and their international competitiveness. The reason is simple. Trump's election in 2016, amid the advent of an era of protectionist power politics, threatened to bring about the death of globalization--a subject that will consume this month's World Economic Forum in Davos, Switzerland. Yet the rest of the world appears to have decided globalization isn't the enemy after all, and that leaves the U.S. playing trade catch-up.

The CPTPP is just one sign of that. 

Whoever we elect after the Donald disaster inherits a boom similar to Bill & the UR.

Posted by at January 18, 2019 3:55 AM