U.S. farmers and ranchers typically get the short end of the stick in international trade deals as negotiators give priority to other segments of the economy over agriculture’s interests, says Larry Combest, former House ag committee chairman.
“One willing to cut a deal the quickest is usually willing to give up the most,” Combest said.
Speaking at the annual USA Rice Outlook Conference recently in Orlando, Combest said the agricultural industry and trade representatives should take a closer look at trade agreements. “We live in a global economy. But our negotiators should first consider producers in the United States before they consider producers in other countries.” He said negotiators should not abandon sound trade practices that give U.S. producers a level playing field.
He labels some talks as “nonsensical trade negotiations,” that do not hold developing nations accountable for currency manipulations and “hidden subsidies to prop up agriculture.
“Negotiations also work under a faulty premise. In GATT and WTO, developed countries are the only ones with serious commitments (to deal with subsidies). That’s the obvious reason there is no movement in DOHA. Developed countries are already well below (recommended) tariff rate levels.”
He said sanctions against the U.S. cotton program stemming from the Brazil case came about with very little burden of proof. “Why doesn’t the United States fight back? Why don’t we challenge the policies of the countries that challenge us? A good offense is always the best defense and caving in and kowtowing is no way to curtail litigation.”
He said parties working on trade agreements should understand better what they are agreeing to. “The system encourages parties to sign off on ambiguous agreements, just to sign a deal. That’s a good deal for the trade negotiators but not for anyone else.”
He said rule of law should pervade trade agreements. “Currently, a lack of credibility is present in the system. That’s why it’s at a standstill.”
He also criticized a “failure to enforce commitments, which leads to a lack of confidence. We need to see the same tenacity in enforcing trade agreements that we do in developing them.”
Combest said agriculture seeks no special treatment — only a fair deal. “Agriculture is a strong proponent of liberalized trade. Farmers and ranchers need to have confidence in trade,” to secure their support. “They could have a strong effect on trade agreements. They can help pass agreements or they can help defeat them. Agriculture has to stand up.”
Combest, responding to a question from the audience, said Cuba should not be ignored. “The Cuban/American lobby is strong, but liberalized trade with Cuba has passed in Congress time and again over the years. The administration is where it comes to a stop.”
Combest said he doesn’t foresee Cuban trade as big a boon to U.S. farmers as others might believe. “We can get products into South America faster than most countries’ neighbors can,” he said.
Combest said Cuban trade is “a highly emotional issue, but any administration that wants liberalized trade with Cuba can get it through Congress.”
Jim Wiesemeyer, vice president, Informa Economics, said trade policy is having little effect on the current farm bill debate but that the farm industry can expect “more challenges from WTO. These challenges likely will succeed.”
He said U.S. farm policy has “been trade distorting,” and he sees “growing protectionism in Congress.”
Wiesemeyer said the DOHA trade round “is not dead, just slow. The Uruguay Round took eight years. DOHA is in its sixth year.”
Wiesemeyer said the Peru free trade agreement will be the last such deal until 2008. “The Democratic Congress does not want to give Bush any victories.”
Floyd Gaibler, USDA under secretary, Farm and Foreign Agricultural Services, said U.S. farm programs affect trade. Bad policies, he said, “risk future growth.”
He said the six-year multi-lateral trade negotiation effort “is at a crossroads.”
Gaibler said focus of that effort includes: eliminating export subsidies, reducing trade-distorting subsidies, and improving market access.
“U.S. domestic support programs will come under pressure,” he said. Administration trade goals include ratifying free trade agreements with Peru, Columbia, Korea and Panama; reauthorizing trade promotion authority; and writing a farm bill that’s “beyond challenges and that supports U.S. agricultural exports.
“Without effective reform commodities will be more vulnerable to WTO.”