Some of the largest and most influential American farm groups are uniting to make their voices heard on reforming trade rules of the World Trade Organization as the institution prepares for its upcoming 12th Ministerial Conference.
It’s unclear how ambitious Gloria Abraham Peralta – WTO's chair of agricultural negotiations – will be when she unveils expectations this week for MC12, but countries and groups of countries are frantically submitting proposals for what they’d like to see included.
And now major U.S. farm groups are joining forces to add to the cacophony of widely divergent views from around the globe that often pit developed countries against developing countries on issues such as subsidies, price supports, tariffs, government stockpiling, and special safeguard mechanisms designed to protect domestic producers from Imports.
“Reform is badly needed, including changes that lead to a market opening agenda for agriculture and a better functioning institution,” groups such as the USA Rice Federation, American Farm Bureau Federation, National Milk Producers Federation, National Cotton Council, U.S. Soybean Export Council and Corn Refiners Association said in a joint letter to U.S. Trade Representative Katherine Tai and Agriculture Secretary Tom Vilsack. “These changes can help improve global agricultural sustainability and support rural communities, workers, and better-paying jobs across the United States.”
WTO countries are unlikely to reach any major reform agreements at MC12, says Sharon Bomer Lauritsen, founder of AgTrade Strategies LLC and former assistant U.S. Trade Representative for agricultural affairs and commodity policy.
There just won’t be enough time and there isn’t enough trade information available for negotiators to effectively negotiate, she said, but stressed that the countries may be able to reach an agreement to improve transparency and set the conditions for future reform.
“Clearly countries are far apart on a full range of issues dealing with agriculture,” she said, but also noted that it may be possible “to have an outcome at MC12 that improves transparency and notifications.”
That, in turn, could lead to the formation of a “work program” – a blueprint on which elements will be the basis for reform.
The letter to Tai and Vilsack from U.S. farm groups – which is being released Wednesday – also takes a strong stance on transparency, supporting a proposal submitted to the WTO on Tuesday by the Biden administration.
Transparency on export restrictions, market access, price supports and other subsidies needs to be vastly improved, according to the new WTO submission that was authored by the U.S., together with the European Union, Canada and Japan.
Argentina, Australia, Uruguay, Switzerland, the UK and Taiwan offered support for the proposal.
Improving global transparency – especially on trade-distorting subsidies – is a key goal for the USA Rice Federation, said Peter Bachmann, the group’s vice president of international trade policy.
“Only half of the major rice exporters around the world are actually reporting,” said Bachmann, who named Thailand, Vietnam and China as examples of countries that are far from transparent about their subsidies.
“Right now we have to assume they’re living up to their commitments without seeing what they are actually providing to their producers,” he said. “We have no idea if they are in compliance with their (WTO) commitments.”
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But the U.S. farm groups that penned the new letter to Tai and Vilsack also laid out other common goals such as stopping countries from using commodity price supports to build up government stockpiles.
That puts the U.S. farm groups at odds with the WTO’s African Group, which includes 41 nations on the continent.
Nigeria, speaking for the group at a Friday meeting in Geneva, proposed prohibiting any developed nations from challenging public stockholding programs in developing nations – even if those nations are using trade-distorting subsidies far beyond limits set in the WTO.
It was an explosive proposal that immediately sparked outcry from WTO officials representing the U.S., the UK, Canada, Brazil, the European Union, Australia and others, according to Geneva trade officials.
The Canadian representatives at the meeting accused the African Group of using food security as an excuse to propose unlimited trade-distorting subsidies for developing nations.
China, India, Indonesia, South Africa and the 62 countries in the African, Caribbean and Pacific Group stressed that they supported the proposal put forward by Nigeria.
India and its price supports are a major concern for U.S. wheat exporters, according to the U.S. Wheat Associates.
“India maintains high support prices for wheat in violation of its WTO commitments, leading to excess production and inflated public stocks,” the group said in a document provided to Agri-Pulse. “In some years, stocks have grown so large that India has exported wheat, a clear violation of WTO export subsidy rules … Essentially, India has attempted to create a permanent loophole for certain types of price support programs associated with state-run stockpiling programs.”
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