WASHINGTON, Oct 6: Agriculture Secretary Mike Johanns said on Thursday that the United States must show leadership in tackling domestic farm supports in world trade talks in order to get what it wants in terms of market access.
Cutting rich nations farm subsidies and tariffs is seen as key if a World Trade Organization ministerial meeting in December is to agree on a formula for lowering trade barriers globally.
“We must use the WTO to force open markets for US products,” Johanns said in remarks prepared for delivery at an agribusiness lunch. “Let me be clear that the WTO will not write our next farm bill but we must show leadership in the area of support programme policy to gain market access in other countries.”
Congressional lawmakers will begin work early next year to write the next US farm law, which sets crop subsidies, farm conservation incentives and other agricultural programmes.
“There is absolutely no doubt in my mind that we can show tremendous support of agriculture without trade-distorting subsidies,” Johanns said.
Up to now the negotiations have been characterized by a stand-off between Washington and the European Union, with the former insisting on winning access to new markets before discussing how to scrap trade-distorting domestic subsidies, while the EU says more progress is needed on the subsidies before market access can be tackled.
Johanns said the United States could sit back and watch its farm policy disassembled piece by piece or it could launch a discussion about how to craft farm policy that provides “a low risk, meaningful safety net for farmers and ranchers.”
He noted the WTO’s decision earlier this year striking down the US “Step 2” cotton programme shook the confidence many felt in the ability of current farm policy to provide a true safety net. Step 2 pays exporters and ginners an incentive to buy higher-priced US cotton.
According to Congressional sources, the EU has proposed a 65 per cent cut in its spending on trade-distorting domestic farm supports, and a 55 per cent cut for the United States. That would trim US spending to $8.5 billion from $19.1 billion and the EU to about $27.6 billion from around $80 billion.—Reuters
