National Journal's Congress Daily
Thursday, March 7, 2002
Ag Groups Fear Retaliation Against Steel Imports Decision
Agricultural trade lobbyists fear President Bush's decision to impose tariffs on steel imports will have an adverse impact on the United States in agricultural trade disputes and point to Russia's announcement last week that it would ban U.S. poultry imports as an early example. Several countries have announced plans in the last few weeks to ban or restrict imports of U.S. agricultural products. But Russia's announcement that it would ban U.S. poultry beginning this weekend because of U.S. growers' use of antibiotics and certain sanitation practices would have the biggest impact. Trade advocates said Russia may have taken the step in expectation of the steel announcement.
U.S. poultry exports to Russia total $600 million a year and account for 20 percent of all exports to Russia. The poultry exports to Russia make up 30-40 percent of all U.S. poultry exports.
Separately, China has announced that beginning March 20, it will require import certificates on genetically modified soybeans, but U.S. officials are troubled that China has not said what the new rules will be. Meanwhile, Brazilian officials also have announced their intention to file a case in the World Trade Organization against the United States charging that U.S. domestic soybean subsidies violate WTO rules.
Paul Drazek, a trade adviser to former Agriculture Secretary Glickman and now a private consultant, said the steel decision has already begun to adversely affect agriculture.
"Poultry exports to Russia come to an end in about a week," Drazek said. "That's a lot of chickens, a lot of corn fed to those creatures and it is going to have a big impact on the price of poultry. But that's an assumption. It could be pure protectionism on the part of the Russians." Craig Thorn, a former U.S. agricultural negotiator and Drazek's partner, said he expects Russia to use poultry as leverage in the steel dispute.
Trade Representative Zoellick indirectly linked the steel and poultry issues at his White House briefing Tuesday.
Zoellick said the United States has granted a tariff rate quota on slab steel, a semi-finished product, that benefits Russia's main steel export to the United States.
Zoellick added: "It's the irony of ironies ... frankly, that's going to be hard to sustain in this program, if Russia doesn't act responsibly on poultry. And I cannot emphasize that enough."
Asked if the United States was making threats that Russian actions on poultry might have negative repercussions for their entry into the WTO and on the repeal of the Jackson-Vanik immigration law, Zoellick said: "They're not veiled threats, they're statements of fact ... If this stays on, I don't see [Jackson-Vanik] getting repealed; it's just a fact of life. And I talked to I talked to [Minority] Leader Lott of our party and he certainly made that point exactly clear to us."
Drazek said the steel decision could also make it harder to resolve the WTO decision against the United States in the foreign sales corporations case brought by the European Union, another issue with implications for agriculture since big exporters have been getting tax advantages from FSCs in their businesses.
It also could make it harder for the United States to negotiate in the WTO because the United States, Drazek said, "will not have the high moral ground." Jerry Hagstrom:
