WTO takes August to regroup

For the full article, click on the headline above.

Director-General Pascal Lamy, in opening the Trade Negotiations Committee meeting at the end of July urged members to study the draft texts on agriculture and industrial goods during the summer break and come back in September "ready to engage in intensive negotiations."

"We have already come a long way in this Round, and the distance left to go is not so great -- but it will require an extra effort," he said.

Draft papers released mid-July by the chairmen of the Doha Development Agenda agricultural and nonagricultural market access (NAMA) negotiating groups call for a U.S. agricultural subsidy cap of between of between $13 billion and $16.4 billion, the latter of which is lower than the U.S. had previously offered. The cap would include countercyclical payments, market loan gains, subsidies on crop insurance premiums and the sugar and dairy programs.

Lamy reported since the informal meeting held at the end of June, the negotiating process in Geneva has been "significantly reinforced and intensified."

Delegations had the month of August to reflect on the draft texts released earlier in July and then be in a position to return to the negotiations Sept. 3. Lamy encouraged members to use the month of August to "examine the texts in detail, to consult, discuss and engage bilaterally."

We'll see if they did.

September is here and it does not look like enthusiasm has grown for world trade talks. Neither of the Houses showed any sign of adopting stricter trade rules in writing their farm bills.

While ag lobbyists were scrambling with the House farm bill, the U.S. business community came out for reduced agricultural subsidies. In a letter to House and Senate leaders, corporate big guns called on Congress to put in place reforms in farm policy that will "create a dynamic opportunity for U.S. trade negotiators to increase the pressure on our trading partners to offer substantial new market access opportunities that would benefit American farmers, manufacturers and services providers."

The letter was signed by the Business Roundtable, U.S. Chamber of Commerce, National Retail Federation, National Association of Manufacturers and the Information Technology Industry Council. All of these groups have a large stake in the NAMA talks.

The groups recognized that nothing can happen on NAMA without a deal on agriculture first.

Bull's eye

Secretary of Agriculture Mike Johanns stated the administration would not support the House farm bill, in part because it does nothing to address many of the world complaints against U.S. farm programs.

"The House bill actually takes a step backward, creating farm policy that is less responsive to the free market, and it paints an even larger bull's eye on the backs of American farmers when it comes to international trade," he told reporters in a press call.

The marketing loan program is categorized as the most trade-distorting, amber-box program under WTO obligations, making it subject to intense scrutiny, Johanns stated. The House Bill raises loan rates on 14 of 25 eligible crops and raises target prices for 12 of 17 eligible crops.

"No one can convince me that there's wisdom in painting an even larger bull's eye. We should be protecting our programs from challenge and thereby protecting our farmers, not the opposite," he said. "The Administration proposed setting loan rates at 85% of the market price averaged over the previous five years, excluding the high and low years. Loan rate caps would be set at the level agreed upon by the approved version of the 2002 Farm Bill. Clearly this is more market-oriented, and it prevents government subsidies from influencing market decisions, and it better protects our safety net from challenge. It better protects our farmers."