World Trade Organization members approved a plan to end export subsidies on farm products and cut import duties around the world. The deal, that is part of the Doha Development Agenda, was approved by a consensus of the 147-country body in Geneva, Switzerland, opening the way for full negotiations to start in September. The trade negotiations were initially launched in Doha in November 2001.
The latest agreement sets the limits of the future package in five key areas: agriculture, industrial products, development issues, trade facilitation, and services.
For developing countries, it was a moment of triumph. The European Union agreed to eliminate its export subsidies. The United States agreed to cut back its export credits and some of its cotton subsidies. Plus, the U.S. will make a 20 percent reduction in some of its $19 billion in subsidies of corn, wheat, rice and soybeans the first year the rules go into effect.
The American Farm Bureau Federation is pleased with the developments. In a statement, AFBF says, “The framework text adopted by the WTO General Council will continue the process of negotiation toward the goal of expanding world markets for American agriculture. The commitments by both developed and developing nations to substantial tariff reductions and deeper cuts from higher tariffs will lead to expanded market access for U.S. farmers and ranchers.”
Another group happy with the framework is the National Corn Growers Association. "This has long been a priority for NCGA and will provide new market opportunities for U.S. grain and value-added products," adds NCGA president Dee Vaughan.
In addition, the European Union’s Agriculture Commissioner Franz Fischler expressed his approval for the agreement: “Today we got a deal which will boost the world economy, farm trade and the opportunities for poorer countries. This agreement also ensures that other rich countries will follow the EU on its reform path. The EU’s reformed farm policy will not be called into question. Now, EU farmers have a clear perspective, developing countries will see better market access and less unfair competition.”
However, there are some groups, including the National Farmers Union, that is disappointed with the agreement.
"This seems to be the administration's way of accomplishing through the WTO what they could not achieve in Congress the elimination of U.S. farm programs," says Dave Frederickson, NFU president. "Once again U.S. farmers are being asked to sacrifice on the altar of free trade without getting anything in return.
"The administration has traded away the interests of farmers and ranchers for agribusiness and non-agricultural sectors.
In the coming months WTO members will develop the agreed framework into detailed and specific commitments. In agriculture the framework agreement will bring a substantial cut in trade-distorting agriculture support, the elimination of trade distorting export competition practices and a significant opening of agriculture markets. All developing countries will benefit from special treatment, allowing them to liberalize less over a longer period. The world's 50 poorest countries do not have to undertake any commitments.
This plan could even out the playing field for global exports, but there are still a lot of unknowns until a final agreement is reached.
Associated Press, AFBF, NCGA