Reuters
WASHINGTON (Reuters) - The head of the U.S. House of Representatives Agriculture Committee said on Friday he would no longer co-sponsor the Trade Promotion Authority desperately sought by President Bush after the administration determined more than $10 billion in farm subsidies had distorted trade.
Rep. Larry Combest, Republican of Texas, said he withdrew his name as co-sponsor after the U.S. Department of Agriculture's (USDA) decision on Friday to report to the World Trade Organization $10.4 billion in production-distorting subsidies to U.S. farmers during the 1998/99 marketing year.
"USDA's decision to classify the 1998 payments as trade distorting is equivalent to a unilateral disarmament that cedes ground and gains nothing in return," Combest said in a statement.
Combest's action strikes a major blow to Bush's efforts to shore up support in Congress this week to obtain broad new trade negotiating authority.
Asked to comment, White House spokeswoman Claire Buchan said: "The president believes that trade promotion is critical to ensuring that America is able to participate in trade negotiations around the world and looks forward to working with Congress to enact this legislation."
On Monday, Bush and dozens of U.S. farm groups launched a united campaign to lobby Congress for quick approval of trade promotion authority.
Under the authority, also known as fast track, Congress cedes part of its constitutional authority over trade to allow the executive branch to negotiate trade agreements that cannot be amended. Instead, Congress would only be able to vote to approve or reject the agreements.
The authority last expired in 1994. Since then, a disagreement between Republicans and Democrats over whether trade agreements should contain protections for workers and the environment has blocked its renewal.
UNWANTED PRECEDENT
USDA said on Friday $10.4 billion allotted to U.S. farmers by Congress during the 1998/99 marketing years was trade distorting subsidies under WTO rules.
For more than two years, Combest has insisted that government payments made after U.S. producers have made their planting decisions in no way distort trade.
In a letter sent to Agriculture Secretary Ann Veneman on Friday, Combest said the administration's actions would have a "profound impact on U.S. farmers and on the ability of Congress to help farmers deal with financial stress."
"The USDA decision creates a precedent for classifying assistance that will apply to payments also made in 1999 and 2000, as well as restrict our ability to make these payments in the future."
The United States, like other WTO members, has agreed to limit spending on "amber box" subsidies deemed to distort production or trade. The U.S. limit was slightly more than $19 billion a year.
USDA said the $10.4 billion in domestic supports were provided through market price support programs, loan deficiency payments and marketing loan gains under commodity loan programs.
"Under WTO rules, these Market Loss Assistance payments must be classified in the amber box," Agriculture Secretary Ann Veneman said in a statement.
"By classifying them properly, we set the right precedent for other nations ... as we move toward a challenging new round of trade negotiations in the WTO." Congress approved $5.9 billion in Marketing Loss Assistance and disaster payments during the 1998/99 marketing year.
Before Combest's announcement, farm groups applauded USDA's actions saying other countries need to follow Washington's lead in respecting WTO commitments.
"This was not an easy action for USDA to take, but it was the right one," said Bob Stallman, president of the American Farm Bureau Federation.
USDA would not comment on Combest's actions, referring questions to the White House.:
