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Wednesday 01 August 2007 « Previous | Next »

US farm subsidies clash with WTO leadership

It is great news for the farmers in the USA. The first step to a new farm bill has been set. This means that over the next five years US farmers will receive 286 billion dollars extra from the government. The subsidy will cover the difference between the market price and the negotiated minimum price for their products.

The basic structure of the subsidy system has not changed, except that farmers with turnover of over one million dollars will be exempt from receiving subsidies. I can understand that the president of the America’s National Farmers Union, Tom Buis is very happy with the new law. His organisation has always been a strong defender of direct support to farmers. He expressed in an interview that as of the start members of the Congress only had the needs of the domestic farmers in mind and did not care about the WTO rules. Why does that not surprises me?

The law passed the House of Representatives right at the moment that Canada and Brazil dropped a complaint about existing US farm subsidies at the WTO desk. It is expected that WTO will soon come up with a conclusion, which can, based on previous verdicts, only lead to a condemnation of the country that always strives to take the leading role in free trade issues.

As soon as the bill has been passed the world can no longer accept a US leadership in the WTO. And comments from the US government or industry leaders regarding foul play by other countries cannot be taken serious anymore.

If home land first again becomes the standard, there is little justification to plea for free trade. The US already has a history in this regard, for instance free trade in poultry products, but is the US now showing their true colours, in that keeping their borders closed for the import of poultry products is not just a sanitary issue. In this respect the subsidy bill shows the real face of the US leaders.

Do we have to be sad about this? I don’t think so. A lot of things can now been placed in a better and clearer perspective. We all may wonder whether this is the end of the WTO or the beginning of a new era in international trade in which homeland security becomes a much wider definition. One thing is very clear: By accepting the new subsidy rule the US has lost its credibility as WTO leader and as guardian of free and fair trade.

Author: Wiebe van der Sluis
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Comments ( 3 )

Ralph, apparently God puts 41 countries before the USA when it comes to blessing. Read Associated Press below: "Americans are living longer than ever, but not as long as people in 41 other countries. A major factor in the U.S. lagging in life expectancy is that 45 million Americans lack health insurance, experts say. For decades, the United States has been slipping in international rankings of life expectancy, as other countries improve health care, nutrition and lifestyles. Countries that surpass the U.S. include Japan and most of Europe, as well as Jordan, Guam and the Cayman Islands."

Bob Girard // Tuesday 14 August 2007

Just this week the House Agriculture Committee released its Farm Bill outlining new changes to federal support for farmers. As the bill relates to sugar, it looks like consumers and workers might get less than a sweet deal. For years our Sugar Program as it is known channels big subsidies to sugar growers to reduce their costs and let them grow more sugar. Yet that's not all Big Sugar gets. The sugar program also severely restricts the amount of foreign supplies of sugar that is allowed into the US market. These restrictions - a blend of very high border taxes and quotas - are designed to make sure that US consumers don't get the benefit of tasting sugar grown in other countries such as Brazil and Haiti.These trade restrictions on foreign supplies of sugar have actually been partly to blame for the elimination of 11,000 sugar refining and candy manufacturing jobs. These industries have had to close their doors to US operations and open shop overseas to take advantage of cheaper supplies of sugar abroad. Of course these jobs wouldn't be lost if Congress eliminated the combination of highly restrictive quotas and tariffs. Instead of turning things around Congress has made this bad system worse. The recently released Farm Bill proposes to make it that much more difficult for US candy makers and consumers to get access to foreign supplies of sugar. In the end, it is workers and consumers that will pay for this kind of protection offered to such a wealthy few. Check out more on this and other consumer issues at: http://www.cwt.org/blog/

Sarah Press // Wednesday 01 August 2007

By doing so, they will be no or little justification for free and fair trade. The US now showing their true colors, in that keeping their borders closed for the import of poultry products is not just a national issue, but also breakdown of free and fair trade. In this respect, the subsidy bill shows the new look of the US. I think this is the starter point for the end of the WTO or the beginning of a new era in international trade in which homeland security will have more interest. By accepting the new subsidy rule, the free and fair trade, will loss their trust and interest.

Prof. Youssef Attia, Egypt // Wednesday 01 August 2007