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Tribute to Dr. Clayton Yeutter

Tribute to Dr. Clayton Yeutter

By James Patterson, Diplomat, Writer, Speaker, Educator

Author: Teresa Lee/Friday, March 31, 2017/Categories: Featured Alumni, Obituaries

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When I left Indianapolis for Washington in April 1984 for service at the US Department of Commerce, Clayton Yeutter was president and CEO of the Chicago Mercantile Exchange (CME), then and now the world’s largest commodity futures exchange. Yeutter joined Reagan’s administration the next year as U.S. Trade representative.

Yeutter held a law degree and a Ph. D. in agricultural economics from University of Nebraska-Lincoln. At Nebraska, Yeutter, in 1950, was inducted in the Fraternity of Alpha Zeta, an agricultural honorary fraternity. Yeutter’s GOP credentials were solid from Nixon to Ford and Reagan to Bush 41.

As U.S. Trade representative 1985-1989 and as Secretary of Agriculture 1989-90, Yeutter’s domestic and international experience helped to resolve trade disputes and, unhappily, escalated others, like the breathtakingly expensive and highly trade distorting U.S.-EU farm export subsidy campaign.

As U.S. Trade representative, Yeutter wrote on trade policy for the 1985 Yearbook of Agriculture, a US Department of Agriculture publication, whose themed title was U.S. Agriculture in a Global Economy. Yeutter educated in an interesting chapter titled Trade Negotiations – Past and Future. The six-page trade history (pages 350-355) was no doubt difficult, if not puzzling, for some farm state producers and lawmakers. Yeutter wrote of the 1890 Trade Act, the 1897 Tariff Act, and the, then, six rounds of GATT, from Annecy 1949 to Tokyo 1979.

Yeutter’s description of Section 22 farm “quotas and fees” granted under GATT in 1955 to the U.S. may be the briefest ever written on the very complicated subject. Section 22 of the Agricultural Adjustment Act allows the President to raise tariffs by 50 percent or impose quotas on cotton, wheat, wheat flour, butter and cheese so as not to undermine Congress’ agricultural policy.

Regarding the state of farm trade negotiations in the mid-1980s and their future direction, Yeutter wrote, “A major U.S. objective will be to bring greater discipline to the rules which govern trade in agricultural products and provide greater opportunities for expanding trade on the basis of comparative advantage.” The economic principle of comparative advantage, as described by Ricardo, states a nation trades in goods it produces above consumption levels for goods it lacks. It explains a mutually beneficial trade arrangement.

Exporting nations long argued the U.S. over produced farm goods due to unfair and trade distorting production subsidies and price supports. The U.S. farm sector argues excess production is due solely to natural agricultural advantages and skilled farmers. Production subsidies, farmers and their lawmakers argue, are needed to compete with unfair production subsidies in other countries.   “Unilaterally disarming” U.S. farm production subsidies when global competitors are highly and unfairly subsidized, I can attest, is fighting talk in the heartland where jobs are dependent on a strong farm economy.  

Dr. Yeutter was a realist on the complexity of farm trade negotiations and the interests, including hardworking farm families, involved. He was a lifelong fighter for trade based on straightforward economic theory and adherence to international trade law. In the 1985 Yearbook of Agriculture, Dr. Yeutter served as trade history educator.  

Yeutter argued for reduction in government production incentives, better land management, and producer orientation to markets for increased profit. In his later years, Yeutter never stopped making these arguments diplomatically. At times, though, he rather verbally stomped on diplomacy.

During the Uruguay Round, Yeutter described agricultural trade policy as “enigmatic, inexplicable, always exasperating and frequently counter to the long-term trade interests of a nation’s agriculturalists.“ (European Yearbook of International Economic Law 2016, page 99).  He clearly expressed his exasperation when he asked, “Why so many nations have worked so hard for so many years to impede agricultural trade is almost beyond comprehension.” It is a compelling question most difficult to answer but an answer may reflect a security need by policymakers or a fundamental lack of economic training of the type Yeutter learned at Nebraska and over a lifetime of analysis.

Yeutter never stopped being an agricultural educator, statesman, and economist. In his foreword as Secretary of Agriculture to the 1989 Yearbook of Agriculture, on the theme of Farm management, Yeutter continued to stress his economic view that “[Farm] Management does make a difference. It is one of the reasons American agriculture is so competitive internationally.”

Yeutter closed his foreword that year optimistically and in language reminiscent of Ronald Reagan. “I believe that American farmers will always be equal to the challenges facing them.” It was an important message for farmers and policymakers in 1989 and also 2017.

Clayton Yeutter, who realized the need for cooperation at trade bargaining tables, was equal to the trade policy challenges of his day and made important contributions to U.S. trade history.  He was a remarkably wise man and an inspiring fraternity brother.

Jim Patterson is a life member of AFSA, Alpha Zeta Alumni, member Society for Historians of American Foreign Relations

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