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Reaction to WTO breakdown

Leaders of most of the major U.S. farm organizations were disappointed but seemingly resigned to the collapse of the five-year-old Doha Round negotiations at the WTO's headquarters in Geneva July 24.

In press statements issued after WTO Director-General Pascal Lamy announced the suspension of the talks, farm groups said they could not have supported an agreement that promised no more than what appeared to be on the table when Lamy declared the negotiations at an impasse.

Typical of the sentiments was the statement released by the American Soybean Association, which had been hopeful that a new agreement would expand markets for U.S. soybeans in the European Union and in the so-called advanced developing countries.

“ASA is disappointed that WTO negotiators were unable to agree to meaningful trade reforms that would level the playing field for U.S. agricultural exports,” said ASA President Rick Ostlie. “But we've said all along that ASA would not support a WTO agreement that failed to provide significant market access improvement for U.S. soybean and livestock products.”

Ostlie joined other farm group leaders in praising the Bush administration for not weakening in its commitment to winning increased market access in the new trade agreement.

American Farm Bureau Federation President Bob Stallman said his organization regretted that the opportunity for fairer trading rules under a new Doha agreement had been missed in the collapse of the talks in Geneva. “Farmers and consumers all around the world had a lot to gain from the Doha Round of WTO trade negotiations,” said Stallman.

“We stand behind our belief that freer and fairer agricultural trading rules would benefit all the people of the world. In the face of these talks being suspended, we will prepare to move forward with proposals to ensure that U.S. farmers have the kind of support they need to survive in today's global trading environment.”

The National Cotton Council, an organization whose members may have had more to lose than gain in the Doha Round after the U.S. cotton program was singled out for special treatment, expressed its appreciation to Schwab and Johanns for refusing to “allow unwarranted pressures or deadlines to undermine the U.S. position.

“Ambassador Schwab and Secretary Johanns have demonstrated they clearly understand that the significant U.S. offer on market access, domestic agricultural support and export subsidies has not been matched,” said NCC Chairman Allen Helms, a producer from Clarkedale, Ark.

“It may take longer than anticipated to bring the Doha Round to a successful conclusion, but the determination of the U.S. negotiating team is a positive sign for U.S. agriculture and for the world's agricultural producers.”

Last October, Schwab's predecessor, former U.S. Trade Representative Rob Portman, tabled a proposal that would have reduced U.S. farm subsidies by 60 percent following the completion of a Doha agreement. But Portman, Schwab and Johanns made it clear the U.S. subsidy cuts were contingent on tariff reductions in the European Union and other countries.

U.S., EU and other members of the G-6 countries — Australia, Brazil, the EU, India, Japan and the United States — continued to meet through the winter and into the spring, but the talks finally broke down in Geneva July 24 after the EU refused once again to make more than token reductions in its tariffs.

Peter Mandelson, the EU's trade minister, blamed the United States for the collapse of the talks, saying once again that the U.S. proposal would not produce “meaningful” reductions in domestic support. U.S. officials disagreed, noting again that the ceiling on U.S. Amber Box subsidies would decline from $19.1 billion to $7.6 billion under the U.S. offer.

Georgia Sen. Saxby Chambliss, chairman of the Senate Agriculture Committee, issued a statement from a farm bill hearing in Ankeny, Iowa, that indicated Mandelson's pronouncement was not unexpected.

“It is not surprising that the European Union continues to dodge blame for refusing to offer a serious market access proposal,” he said. “Where the European Union desires a deal that only protects their farmers, the United States wants a good deal that lowers barriers to trade.

“The WTO is not a debating society. If the Europeans are serious about the negotiations, they will take advantage of this cooling off period and come back with a proposal that significantly reduces tariffs in developed and developing economies. The United States will not negotiate with itself in an endless cycle that builds barriers between trading partners.”

Chambliss said Ambassador Schwab and Secretary Johanns deserved applause for “not caving to pressure calling on the United States to unilaterally disarm. They will be coming home knowing that farmers and ranchers across the country stand firmly behind them.”

The USA Rice Federation also commended Schwab and Johanns for standing with the U.S. rice industry by “insisting that a Doha agreement provide U.S. farmers and exporters with real and measurable market access gains in order to justify cuts in U.S. farm programs.

“Despite press releases and rhetoric, it is clear that the market access offers by the European Union and several other WTO players are illusions and will not result in a real expansion in trade,” the Federation said. “They simply don't stand up to the aggressive U.S. proposal tabled in October 2005, and the administration was right to stand firm.”

A National Corn Growers Association representative echoed the sentiment that “no deal is better than a bad deal” that seemed to be running through the U.S. farm community after the collapse.

“We support the U.S. negotiators and their strong push for an ambitious market access package in any final agreement,” said Bob Bowman, chairman of the NCGA's Joint Trade Policy A-Team. “We will continue to agree with the negotiators that no agreement would be better than a bad agreement that would negatively impact our producers.

“With that said, we are hopeful that we will be back at the table to work toward a final agreement.”

Farm-state House members also praised the U.S. negotiators for not committing to a deal “that would have been bad for U.S. agriculture,” according to Rep. Randy Neugebauer, R-Texas.

“Our trade team made the right decision to walk away from the table,” he said. “A close look at the proposals from other countries shows that they were full of loopholes and would have resulted in little or no market access gains. We had the most ambitious offer on the table, but the U.S. was still told it was not enough.”

One farm organization president said he was not surprised negotiators were unable to reach an agreement, citing what his group perceived as gaps in the agenda for bringing the Doha Round to a successful conclusion.

“We have felt from the beginning it would be difficult to come to a successful conclusion as long as the negotiators failed to include all factors of trade,” said NFU President Tom Buis. “These negotiations continued the same free trade agenda that has not worked for U.S. farmers in the past, as demonstrated by the fact the U.S. agriculture trade surplus has virtually disappeared in the past decade.”

Buis said NFU believes the WTO must address other issues such as labor standards, environmental standards and currency manipulation if a new Doha agreement is to be worthwhile.

“These are items that pit farmer vs. farmer and country vs. country to perpetuate this race to the bottom of commodity prices that benefits the international traders, but not farmers,” he said. “The No. 1 goal should be profitability for all farmers from the marketplace.”

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