Major agricultural countries in the developing world, such as China, India and Brazil, are increasing their farm subsidies and displacing U.S. ag exports on the world market, two trade analysts told the House Agriculture Committee. “The United States, as the biggest agricultural exporter, suffers most from these distortions,” said Craig Thorn of DTB Associates. U.S. negotiators have raised the issue at WTO discussions. “In my opinion, it would be extremely foolish” for the United States to agree to a re-start of the Doha Round of trade talks without the assurance “that any new disciplines will be targeted at the policies most responsible for current distortions,” said Thorn.
The Doha Round has been stalled for years. The current goal is for nations to agree by July on a “work program” that would be a springboard at a ministerial meeting in December to revive the round, which began in 2001. WTO director general Roberto Azevedo said this week, “I am becoming increasingly concerned that we are not making the progress that is needed in the key areas of agriculture, industrial products, and services.”
With commodity prices in a slump amid ample world supplies, U.S. farmers and lawmakers have raised complaints of unfair practices by competitors. House Agriculture chairman Michael Conaway said the United States “must defend its farmers in a world where trade manipulation and distortions by foreign governments often come at the expense of America’s farmers.” Cotton prices may be low for years because China wants to scale back its huge stockpile, said Conaway, who represents Texas, the No. 1 cotton state. He said the government “must stand by America’s cotton farmers while the situation is made right.”
“Developing-country support is growing exponentially,” said economist Darren Hudson of Texas Tech, while U.S. support levels are average or below average. “Other countries are treating their agricultural sectors as a national asset for security purposes and for the United States not to consider the implications of those choices would leave us at a disadvantage.”