U.S. Plan Would Cut Farm Product Trade Barriers

WASHINGTON, DC, July 25, 2002 (ENS) - The United States is proposing to make global trade in agricultural goods freer by cutting tariffs and eliminating trade distorting subsidies, U.S. Trade Representative Robert Zoellick said today. The plan is supposed to benefit U.S. farmers and consumers, the world's poorest nations and, eventually, the global economy.

During a news briefing today in Washington, Zoellick said the U.S. proposal will be tabled at the World Trade Organization (WTO) talks in Geneva the week of July 28.

Sprinklers controlled by a central computer irrigate wheat, alfalfa, potatoes, and melons along the Columbia River near Hermiston, Oregon. (Photo by Doug Wilson courtesy USDA)

Agriculture Secretary Ann Veneman will present the proposal to her counterparts from Australia, Canada, the European Union and Japan this weekend at a meeting of agriculture ministers in Japan.

"Reform in global agriculture," Zoellick said, "is a key to world economic strength and recovery. Across all markets free trade has spurred global prosperity for the past five decades, but high barriers in farm products have prevented agriculture from being a full participant in this growth. And this has hurt America's farmers and farmers around the world."

One in three acres in America is planted for export. For American farmers, the plan proposes to limit use of trade distorting supports such as price supports and input subsidies to five percent of country's agricultural production value.

The comprehensive package, Zoellick said, is based on the objective of leveling the playing field for all countries, working towards the eventual elimination of all barriers to agricultural trade and growing the markets for world agricultural trade.

U.S. Trade Representative Robert Zoellick (Photo courtesy U.S. Government)

"As I have traveled throughout Latin America, Africa, Southeast Asia, I have seen, with my own eyes, the harmful impact of closed markets," Zoellick said.

The U.S. proposal is a two phase process for trade reform. The first phase eliminates export subsidies and reduces worldwide tariffs and trade distorting domestic support over a five year period. This would be accomplished by substantially reducing very high tariffs and levels of trade distorting domestic support than what is currently allowed under the Uruguay Round.

The second phase is the eventual elimination of all tariffs and trade distorting support by a date to be established in these negotiations.

California producer Michael Rue, incoming chairman of the USA Rice Council and a member of the Grains, Feed and Oilseeds Agricultural Technical Advisory Committee, said the proposal is good for rice growers.

Rice grower Chris Isbell (left) and USDA rice expert Bob Dilday check a field of Akita Komachi rice. (Photo courtesy USDA)

"It's critical that U.S. rice farmers, millers and exporters achieve real progress in opening up foreign markets and lowering the very high tariffs overseas as part of any overall ageement that reduces trade distorting domestic supports," said David Van Oss, chairman of USA Rice.

Outlining the U.S. plan in more detail, Allen Johnson, chief negotiator in the office of the U.S. Trade Representative, said the U.S. proposal builds on the momentum created at the November WTO ministerial meeting in Doha, Qatar.

Johnson said that it calls for ending special rights or privileges in export sales for state trading enterprises such as the Canadian Wheat Board, prohibiting export taxes on agricultural products, and strengthening disciplines on export credits.

Johnson noted a wide disparity in the use of export subsidies between the European Union, which accounts for almost 90 percent of these supports used worldwide, and the rest of the world.

In the market access area, Johnson said, the proposal urges the reduction of all agricultural tariffs through a formula that will cut higher tariffs more than lower tariffs, and calls for capping all tariffs at 25 percent at the end of a five year period.

The proposal, if adopted, would result in the average U.S. tariff on farm products falling from 12 percent to five percent, he said.

Zoellick said he believes that the United States can count on the support of the Cairns Group and developing countries for this proposal.

He said he expects African as well as other poor countries to be pleased with the U.S. proposal because in the current system they cannot afford to subsidize their farmers and overcome the high tariffs of other countries. But he added they also are disadvantaged by their own high tariffs on imports from within the developing world.

The Cairns Group of agriculture exporting countries includes Australia, Argentina, Brazil, Canada, Chile, Colombia, Fiji, Hungary, Indonesia, Malaysia, New Zealand, the Philippines, Thailand and Uruguay.

In Japan, European Agriculture Commissioner Franz Fischler addressed the trade distortion issue in his speech to the Japanese Federation of Agricultural Cooperatives, journalists and agri-business representatives in Tokyo.

Vineyard in France (Photo by Ian Britton courtesy Freefoto)

"We are determined to give an example that it is possible to support farmers while limiting the effects on international trade. We [EU and Japan] both believe in a fair and sustainable trading system, that all countries should profit from more open trade, and that more open trade means more wealth for all countries."

However, liberalization does certainly not mean that we abandon our farmers. There are many good reasons to support our farmers: they maintain our landscape, they keep the countryside dynamic, they take care of the environment. But protecting our farmers need not mean protecting our markets. We believe that preserving our agricultural system can be done without trade barriers," Fischler said.