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Forces Rally Ahead of WTO Meeting

With trade ministers gathering today in Geneva, Switzerland, there are worries back in the United States that the Bush Administration's trade negotiators may give away more than necessary just to get an agreement at the World Trade Organization. That sentiment was expressed in a letter started by Kent Conrad, D-N.D., and signed by 57 senators, that was sent to the president early this week.

The letter expresses concerns that the United States is offering major cuts in programs and export subsidies and farmers are worried about their incomes. While the administration maintains that any cuts are contingent on concessions by trading partners, Conrad's letter expresses a worry that many trading partners keep calling for even deeper cuts in U.S. programs "even as they reject movement toward real improvements in market access."

During a press conference Tuesday, Agriculture Secretary Mike Johanns, commented that the WTO talks are at a critical stage, noting that this would be a "make or break stage for us." He notes that "we are literally down to a point where there just isn't much time left to have this Doha Round come together."

In the end, the Conrad letter urges Bush negotiators to reject any proposals that call for greater cuts on the part of the United States and "instead insist on an ambitious, balanced result that will level the playing field for U.S. agriculture, open foreign markets to U.S. agricultural exports, and increase net income prospects for U.S. farmers and ranchers.

The American Soybean Association, in a statement released late Tuesday, supported the letter, noting the association shares Conrad's concerns. "The Senate letter is a clear signal that members of Congress recognize that an unbalanced agreement is unacceptable," says Bob Metz, ASA president. Metz is in Geneva this week for the trade negotiations.

ASA, American Farm Bureau Federation, National Corn Growers Association and other organizations sent their own letter to President Bush earlier this month opposing further cuts in farm programs since market access gains were not materializing in the WTO negotiations.

Johanns apparently agrees with the sentiment of the Conrad letter noting that the agreement must be a level playing field. "I can't come to these folks on the Hill and say that we have given away our domestic support if I can't get a very solid market access agreement. These are the folks that really step up for us and help us get the trade agreement to the finish line."

The text of Conrad's letter follows:

Dear Mr. President:

When discussions on the current round of negotiations in the World Trade Organization (WTO) began, there was a broad, bipartisan consensus that our negotiators should focus on producing a good result for U.S. agriculture. As this summer=s deadline for agreeing on the outlines of a WTO agreement approaches, we write to express our deep concern about the direction of the negotiations on agriculture. Our support for an agreement depends on achieving a balanced, ambitious outcome in which gains from new market access and the elimination of export subsidies provide net gains for U.S. agriculture in relation to reductions in trade-distorting domestic support.

Last October, the United States put forward an ambitious proposal that included substantial cuts in U.S. domestic farm programs if other countries would agree to significantly reduce their tariffs on agricultural products and provide greater access to their markets. Many of the farmers we represent were concerned that the cuts in farm programs would directly reduce their income, while the market access gains were speculative at best. However, your Administration insisted that its offer was conditional: if the market access gains did not materialize, the United States would not agree to a disproportionately ambitious reduction in domestic support.

Unfortunately, many of our trading partners continue to call for greater cuts in U.S. farm programs, even as they reject any movement toward real improvements in market access. These countries have refused to make significant tariff reductions, and they insist on exceptions for sensitive and special products that will render meaningless the modest tariff reductions they have proposed.

It is not only U.S. agriculture that stands to gain from reduced tariffs and greater market access in food and agriculture trade. Most economic studies conclude that the majority of benefits of trade agreements in agriculture are generated by significantly cutting tariffs on food and agriculture products. Thus, a failure of the WTO negotiations to achieve an ambitious outcome on market access will hurt not only U.S. agriculture but also the global economy and people around the world.

It is simply untenable for some of our WTO negotiating partners to suggest the onus is on the United States to accept an unbalanced proposal B one with substantial cuts in our trade-distorting support but only minimal gains in access by U.S. agriculture to foreign markets B in order to save the Doha Round from their reluctance to make ambitious market access offers. This is not an honest framing of the issue.

An unbalanced proposal that asks U.S. agriculture and rural communities to give more while getting less in market access is unacceptable. We urge you to direct your negotiators to reject any such proposal and instead insist on an ambitious, balanced result that will level the playing field for U.S. agriculture, open foreign markets to U.S. agricultural exports, and increase net income prospects for U.S. farmers and ranchers.