Spurred by continuing Third World pressure to reduce agricultural subsidies, U.S. commodity leaders held a joint press conference to insure there is no question as to just what they expect from the upcoming World Trade Organization meeting in Cancun, Mexico.
Spearheaded by the American Farm Bureau, the various commodity groups present at the Washington, D.C., press conference said that U.S. producers' support of reduced subsidies is dependent on both market access and the degree that their counterparts in other countries do the same.
Declaring their intentions to play a major role in upcoming trade negotiations were representatives with the American Farm Bureau Federation, American Soybean Association, National Corn Growers Association, National Cotton Council of America, USA Rice Federation, National Association of Wheat Growers, National Barley Growers Association, National Grain Sorghum Producers, American Sugar Alliance, National Sunflower Association, U.S. Canola Association, American Sugarbeet Growers Association, National Milk Producers Federation, and Wheat Export Trade Education Committee.
“We appreciate the need to reach agreement with other participants in the current negotiations and understand that compromise will require modifications in the U.S. position,” they said. “However, our support for any final agreement will depend on whether specific objectives are achieved within and between the principal areas of the negotiation.”
Objectives detailed by the group at the press conference are threefold: market access, domestic support, and export competition, with market access “the most critical.”
Because most of the growth in future demand for agricultural products will occur in developing countries, the commodity groups say developing countries must make substantial improvements in market access, and not be allowed to exempt ‘special products’ from required tariff reductions.
In addition, the group says, “Countries providing higher levels of trade distorting subsidies must be required to make larger reductions with the view toward limiting such trade distorting support to a common fixed percentage of the value of agricultural production.”
The National Cotton Council says cotton producers and ginners have a significant stake in WTO agreements on agriculture, textiles and apparel, phytosanitary rules and export subsidies. The last two years, the Council says, have seen fundamental changes in the U.S. cotton industry.
Domestic mill use of cotton has declined from 11.4 million bales annually to less than 7 million bales. The U.S. crop of about 18 million to 19 million bales, a decline compared to the 1991-96 average, has looked increasingly to export markets as domestic textile manufacturers have been driven out of business by cheap textile imports, many of which enter our market illegally or have been spurred by artificially low exchange rates.
“Carefully crafted trade agreements can be of significant benefit, but poor agreements can put the U.S. cotton industry out of business,” the NCC said in its statement.
“It is imperative that negotiations under the WTO insure the industry greater market access and an enhanced ability to combat the unfair trade practices of competitors. The economics of cotton production are inextricably linked to textile policy and production, both in the United States and around the world.”
The American Soybean Association says its support for any WTO negotiations also depends on whether specific objectives are achieved or not.
“The value of any final agreement to U.S. soybean farmers will depend on many details yet to be negotiated,” says ASA President Ron Heck, a soybean producer from Perry, Iowa. “The degree to which ASA members will support reductions in trade-distorting domestic programs is dependent on the degree to which market access is improved in both developed and developing countries.
“Similarly, the degree to which U.S. producers will support reductions in trade-distorting domestic support is dependent on whether developing countries that are major agricultural exporters agree to accept similar disciplines on their own trade-distorting credit, investment, and tax subsidies.”
While the soybean association agrees that market access is a critical element of the WTO negotiations, they say any final agreement must both harmonize tariffs and substantially improve market access for U.S. agricultural exports in developed and developing countries. Peak tariffs must also be capped and reduced over time.
“Most of the growth in future demand for agricultural products will occur in developing countries,” says Heck. “For this reason, developing countries must also make substantial improvements in market access and not be allowed to exempt ‘special products’ from required tariff reductions or increases in tariff rate quotas.
“Countries providing higher levels of trade distorting subsidies must be required to make larger reductions in those support programs,” he says. “And expenditures for non-trade distorting policies must not be subject to limits or caps.”
In the area of export competition, the groups agree that export subsidies and similar trade-distorting policies like state trading enterprises and export monopolies must be eliminated in a timely manner.
Paul “Jackie” Loewer, vice chairman of the USA Rice Federation and chairman of the U.S. Rice Producers' Group, joined the American Farm Bureau Federation and other commodity group leaders in calling for meaningful improvements in market access at the upcoming WTO ministerial meeting in Mexico.
“Any agreement by U.S. trade negotiators to reduce the safety net of U.S. farm programs must be accompanied by concrete and enforceable reductions in foreign tariffs and other barriers to U.S. rice,” he said. “Hard-working U.S. producers must not be made to bear the brunt of any U.S. concessions.”