U.S. Farm Trade Complements World Trade

Up nlike many other developed counties, the United States enjoys a competitive advantage in world agricultural trade. Abundant natural resources and modern technology have helped make the United States a net exporter of agricultural products. Competitive advantages in agricultural trade are particularly strong for U.S. grains and oilseeds. These findings are based on comparisons of an economic statistic called "relative trade advantage," or RTA. The RTA identifies a country's competitive advantage or competitive disadvantage for an individual commodity or for an industry as a whole (see box). Based on international trade data, the RTA measures the ability of domestic producers of a specified commodity to compete against other commodities for national resources. It also shows how well the country competes in international markets for the specified commodity. RTA's are generally positive when exports exceed imports. Since no country exports without also importing, each country will have commodities with positive and negative RTA's