Grand Forks Herald | September 15, 2003 Monday European Union Trade Commissioner Pascal Lamy said Sept. 12 that he expects the United States to agree to reform its 2002 farm bill to follow the lines of the European Union Common Agricultural Policy reform as part of the Doha trade round.
Asked by a reporter what he expected of the United States and the developing countries on agriculture, Lamy said, "What we ask from the United States is a reform bill and a reduction in the domestic support that matches what we are doing at home."
In what appeared to be a veiled reference to Brazil, Lamy added that he wants the developing countries "that have competitiveness to open their markets to other developing countries" and that he would ask the competitive developing countries to "do what we did for the least-developed countries." The European Union has agreed to admit most products from the world's poorest countries free. Lamy said he believes major benefits in the round could be achieved in "south-south trade" - trade among the developing countries.
European Union Agriculture Commissioner Franz Fischler told Agweek after the press briefing that the European Union would be satisfied if the United States would shift its farm spending from the WTO amber box that contains trade-distorting subsidies to the partially trade-distorting blue box and nontrade distorting green box. Fischler said the EU goal was to push the United States to "less trade-distorting measures." The European Union last summer announced a CAP reform that would shift most spending from production-related payments to farmers to "decoupled" payments that are not dependent on the amount of products grown or animals raised. Trade theorists prefer "decoupled" payments because farmers do not get more government money for a higher level of production.
Allen Johnson, the chief U.S. agriculture trade negotiator, said at the U.S. briefing that the United States had offered to "cut" its farm program as part of its Doha Round agriculture proposal, but also acknowledged that under a farm bill reform, spending on green box programs such as conservation and research could rise. The WTO places no limit on a country's green box spending.
American Farm Bureau Federation lobbyist Mary Kay Thatcher said that if U.S. negotiators were to agree to the EU demand the United States would be able to keep direct payments to farmers and countercyclical payments when prices are low, but probably would have to change the marketing loans farmers get on specific products. Thatcher said changing that program would be a hard sell politically because the general public criticizes direct payments and because landlords might be likely to take land out of production if they get higher direct payments. Thatcher noted that Texas rice and cotton farmers already have complained landlords who get direct payments have taken land away from them and put into grass because it's easier to manage.
Which direction? House Agriculture Committee staff director Bill O'Conner Jr. said that if there is a Doha Round agreement before the 2002 farm bill expires in 2007, Congress will reform the farm bill in accordance with the WTO agreement, not EU demands.
House Agriculture Committee Chairman Bob Goodlatte, R-Va., who is part of a delegation in Cancun, said Congress would look at all proposals, adding the European Union's trade-distorting subsidies "have been enormous in comparison with ours." House Agriculture ranking member Charles Stenholm, D-Texas, said he agreed with Goodlatte, adding that he believes it is "ridiculous" the Europeans are advising the Americans on how to cut farm programs.
Senate Finance Committee ranking member Max Baucus, D-Mont., said, "I'm surprised no one asked what more the Europeans could do." Baucus said he believes U.S. negotiators should refuse to deal with the European demand for geographic indicator protection for wines, spirits and cheeses because the Doha Round is supposed to be about trade liberalization and G.I.s are a "new" protectionist measure.
Asked about how he thinks Bush administration U.S. negotiators are doing in general at the Cancun ministerial, Baucus smiled and said, "The proof is in the pudding."Grand Forks Herald:
