As tariffs intensify, Cargill emerges as leading pro-trade voice

WASHINGTON – Devry Boughner Vorwerk's speech to global development experts in the nation's capital last week was a call to action.

Global trade, said Cargill's chief of global corporate affairs, can be a development tool that promotes the environment, education and equality. But only if people and organizations become activists willing to work with one another.

"Without our leaders sitting around the table together," Vorwerk warned, "isolationism becomes the order of the day."

Cargill, the Minnesota-based agricultural and shipping giant that is one of the world's largest private companies, has emerged as a leading voice in support of global trade as President Donald Trump imposes protective tariffs on other countries.

Vorwerk spoke at the Devex 2018 sustainable development exposition three days after Trump broke with U.S. allies in the G-7 over tariffs that will sharply raise the price of U.S. imports of aluminum and steel from Canada, Mexico and the 28 countries of the European Union.

The president says the tariffs are necessary to rebuild the U.S. steel and aluminum industries for reasons of national security. He believes the levies will lead to an increase in American manufacturing jobs.

A few days after Vorwerk spoke, the president imposed 25 percent tariffs on $50 billion worth of Chinese products to punish that country's theft of U.S. intellectual property and the forced transfer of U.S. technology to Chinese companies that do business with U.S. counterparts.

The tariffs on Chinese products will likely produce retaliatory tariffs on U.S. agricultural products that could include Minnesota-grown products such as soybeans, corn and livestock, such as hogs.

With a possible trade war looming, Vorwerk called for a series of actions that the Trump administration opposes.

Cargill wants the U.S. to return to the 11-nation Trans-Pacific Partnership trade agreement from which the president withdrew, saying negotiations with individual countries would render fairer deals for America.

The company wants support for the North American Free Trade Agreement, which Trump has argued unfairly favors Mexico and Canada over the U.S. and jeopardizes jobs in this country.

Cargill wants an end to the Cuban embargo, which the White House won't agree to.

A final recommendation — opening trade with North Korea — might play better since that country's recent summit with the U.S.

"When we [at Cargill] talk about trade, it's not about any one administration's view," Vorwerk said in an interview after her speech. "It's about what we believe."

What Cargill ultimately hopes for, and what turned into an applause line for Vorwerk, is a return to a rules-based trading system overseen by the World Trade Organization (WTO). There have been failures in the current worldwide trading system, Vorwerk admitted. There have been winners and losers. There is clearly room for improvement. But the way forward demands a structure.

"Without the WTO," Vorwerk told the Star Tribune, "the trading system is in chaos."

For instance, the Agricultural and Applied Economics Association just published an article predicting a $2 billion to $3 billion annual hit to U.S. economic welfare — including Minnesota's huge soybean sector — if the Chinese retaliate to new U.S. tariffs by taxing U.S. soybeans.

Specialists say the voice of a big company in favor of global trade is important at this juncture in U.S. economic history.

"I think one company can make a huge difference," said Susan Aaronson, a research professor of international affairs at George Washington University and author of books titled "Trade Is Everybody's Business" and "Are There Trade-offs When Americans Trade?"

"What companies should be doing is educating."

"Trump is undermining the rule of law," Aaronson maintained. "Trade is about mutual benefit. It is built on trust. The rest of the world feels pretty angry."

The White House, among others, counters that China and other countries have unfairly blocked access of American products to their markets.

Some countries aggrieved by the administration's new tariffs already have complained to the WTO, but that is not a surefire solution unless everyone involved respects the WTO's authority.

"If [the WTO] does not rule in favor of the U.S.," said University of Minnesota international trade professor Robert Kudrle, "I imagine Trump will ignore it."

Vorwerk, who worked on trade issues in the government before joining Cargill, conceded the difficulty of stumping for multination trade agreements and a rules-based global trading system in such an atmosphere.

"This is one of the more difficult moments that I've experienced on trade in my career," she said.

She is banking on what she calls Cargill's "legacy of success" in business to convince people that global trade and trade agreements can work to everyone's benefit in feeding the world, sustaining water and land and improving human rights.

In her speech, Vorwerk conceded her company's vested interest in global trade and acknowledged that some in the audience were probably thinking, "There's Devry, the corporate gal, talking about the thing that benefits her and her company's bottom line."

Still, her proposal for a global system of rules-based trade as part of international development strategy struck a note. She could barely eat lunch for people coming up to talk about it.

Jim Spencer • 202-662-7432