fb - voice of agriculture
August 2003

WTO Talks Shape the Future of Agriculture


Bob Stallman
President
American Farm Bureau
By Bob Stallman
President, American Farm Bureau

A friend once shared a story about his son – I'll call him John – who was in middle school at the time. Seems that John had learned a tough lesson about the art of negotiation.

John had saved for months for a computer game. He did whatever he could to save enough to buy it. When he took the game to school, a savvy classmate offered to trade him a CD player for it. John jumped at the offer only to find out once the deal was done that the CD player skipped, the earphones didn't work, and he missed his computer game more than he thought he would.

As you can guess, my friend wasn't too happy with his son for trading the expensive game in the first place. However, he used the opportunity to instill in John how important it is to get all the details during negotiations, how important it is to evaluate what you will give up compared with what you will gain from the deal and how important it is to stick to the agreement once it is reached.

Charting Agriculture's Future

While John will recover from his poor trade, United States agriculture finds itself facing much higher stakes in the ongoing World Trade Organization's Doha Round negotiations. What comes out of these negotiations will greatly affect our businesses and how American agriculture will deal with our customers and our competitors.

Although there is risk, Farm Bureau believes this is agriculture's best opportunity to address a number of trade problems.

However, after a thorough review of the trade proposal set forth by WTO Agriculture Committee Chairman Harbinson, the American Farm Bureau Federation Board of Directors voted unanimously that the Farm Bureau position is that having no new WTO agreement would be better than accepting a poor agreement and that the current Harbinson proposal is a poor agreement for American agriculture.

The board just does not feel what American agriculture will gain from the Harbinson proposal is worth what we will lose. Harbinson's proposal is inadequate in achieving harmonization in domestic subsidy levels, and it would have little market opening impact because it is not aggressive enough in reducing disparities in countries' tariff levels. If that weren't enough to cause concern, it also would allow countries to shield their more sensitive products from deeper tariff cuts.

Another major concern Farm Bureau has with the proposal is the markedly lower levels of commitment and longer phase-in periods for developing countries that would produce a real lack of reform. Since the majority of WTO member countries are developing countries, there needs to be better criteria established to determine whether a country is developing or developed in a certain product sector.

On the other hand, Farm Bureau continues to support the Bush administration's trade package proposal brought forth last year. The package aims to increase market access, eliminate export subsidies – the most trade-distorting of all practices – and provide a fair method for limiting domestic support levels.

Finalizing a Fair Deal

Trade liberalization legitimately causes concern for many in agriculture. Trade for us farmers is indeed a two-sided coin, but we have many goods to sell to the 96 percent of the world's population who live outside our borders. Our borders are relatively open now – we impose an average tariff on competing ag products of about 12 percent yet our goods face a global tariff average of 62 percent. Through successful WTO negotiations, however, American agriculture could carve out a better and fairer deal.

WTO trade ministers are scheduled to meet in September in Cancun, Mexico, to continue a critical phase in the negotiations. America's farm and ranch families need to follow the process. Farm Bureau leaders and I will be in Cancun in order to help make sure any agreements reached are the best possible for American agriculture.

Farm Bureau will review all the details, weigh the gains versus losses, and expect those who enter into agreements to fulfill their promises and abide by their commitments. Unlike John's disappointing trade with his classmate, Farm Bureau wants to help ensure whatever agreement reached will bring a bright future for America's farm and ranch families.