Reconciling National Interests in an International Arena

By Anna Mullins

amullins@meistermedia.com

Lengthy and often stale-mated negotiations of farm policy are not unique to the United States; similarly frustrating debates have been going on since 2001 in the WTO Doha “development” trade round. With many parties at the table, and many interests to be served and protected, it can be hard to find a common ground. The controversy over the long awaited passage of a U.S. farm bill is not confined to American soil, either. With this new legislation comes a cry of “foul” from a few WTO member nations, Brazil being the loudest voice.

The almost $300 billion farm bill, which survived a Presidential veto last week, could very well be the nail in the Doha trade talks’ coffin. Complaining nations have a good point: they have been working at lowering tariffs and subsidies among members and now the U.S. has come forth with new legislation that allows for continued domestic subsidies. It doesn’t seem that the U.S. is being a very compliant trade partner. Instead of reigning in subsidies at a time when cotton, as well as other crops, is selling at record highs, Congress made significant changes and raised support levels to farmers.

The WTO recently maintained its findings that the U.S. has, to this point, not adequately complied with the original cotton dispute brought by Brazil. The elimination of the Step 2 program and the small modifications made to the U.S. loan programs that subsidized exports were insufficient solutions to the accusation that the United States is creating serious prejudice in the world cotton market. Pressure is mounting. Will the U.S. Congress be forced to go back to the drawing board with their fresh bill? Doubtful. The U.S. farm lobby has a pretty rich history of keeping domestic interests far above the interests of the WTO. There would have to be some rather serious sanctions imposed to shake the resolve of the U.S. Congress here, I think.

So does this mean the U.S. should once again be vilified by the global community for our agricultural stubbornness? Is this new farm bill a clear sign that America is unconcerned with proving equal access to markets around the world? I don’t think we should be so quick to judge. Yes, cotton prices are at an all time high, but so are production prices. U.S. farmers are enduring harsh economic conditions and ever escalating fuel prices, while the quantity of cotton acreage is continuing to decline domestically. Cotton acreage is lower this season than it has been in almost two decades. And of course we can’t forget that U.S. farmers are paying large amounts for technology that is being domestically developed, technology which other cotton producing countries enjoy.

America did agree to some limited rules about certain trade-altering subsidies in the past, but with the changing market, policy adjustments are inevitable.