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Trade talks seek tariff reductions, access to markets

Trade negotiators from across the globe have nailed together a framework on which they plan to build the next international trade agreement. But the hammering continues, says Gary Adams, vice president for economics and policy for the National Cotton Council.

Adams participated in a Texas Commodity Symposium via teleconference recently, part of the annual Amarillo Farm and Ranch Show.

“The Doha Round will determine the next trade agreements,” Adams says. “The framework simply defines the ground rules to take into the formal discussions.”

Adams says a goal of the next round of talks, which have as yet to be scheduled, will be to eliminate export subsidies. “That's part of the framework,” he says. “The timeframe for elimination, however, remains to be negotiated. The European Union is one of the heaviest users of export subsidies.”

He says market access also makes the list of priorities. “Improvements in market access to all products will be important,” he says. “Reducing tariffs also will be key.”

He says tariff reductions likely will be accomplished through a tiered plan, a little at a time. Less developed and developing countries will have more time to cut tariffs.

Adams says changes mandated by findings of the WTO panel created to hear the Brazil claim against the United States for distorting cotton prices may take a year or more to enact.

“If the findings are not overturned on appeal, the United States will have an appropriate time to comply. And if Brazil is not satisfied, their representatives can go back before the same panel again.”

Adams says both parties found reasons to appeal the panel's initial rulings. “An aggressive appeal is under way. The situation will play out over the next three months.”

He says farmers should not expect changes in the cotton program any time soon, even if appeals fail. “Changes would have to be through legislation and then we have a time lag for implementation. At the earliest, it will be well into 2005 before any significant change can be made.”

Adams says payment structures, direct and counter cyclical, may be scrutinized for cotton and other commodities. He says WTO has no enforcement power. “Each member is expected to make appropriate changes.”

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