August 17, 2019

Trade Negotiations & U.S. Farm Subsidies

Reuters writer Missy Ryan reported this morning that, “A bipartisan group of U.S. senators urged the Bush administration to reject deep cuts to U.S. cotton subsidies in world trade talks, promising to oppose any agreement with major subsidy reforms that some poor countries insist they need to compete on world markets.

“‘We cannot abandon a group of farmers who have operated within the parameters of a program written to comply’ with existing trade rules, Sen. Saxby Chambliss of Georgia and nine other southern lawmakers said on Thursday in a letter to U.S. Trade Representative Susan Schwab.

“‘Treating cotton differently than all other agriculture products in the Doha Negotiations will further erode support in the U.S. Congress for the WTO and the Administration’s trade agenda,’ wrote Chambliss, the top Republican on the Senate Agriculture Committee, and his fellow senators.”

The Reuters article indicated that, “The U.S. cotton industry, which produces 40 percent of the cotton on world markets, wields major political clout in Congress, but it has suffered setbacks since Brazil triumphed several years ago in a WTO case against its subsidies.

Despite the recent dip in corn prices, USDA’s National Agricultural Statistics Service reminded readers in their August 31 Agricultural Prices report that corn prices are still high from an historic perspective.

Some reforms were made, but the two countries are still battling over whether more needs to be done.

“The senators’ letter is another sign of U.S. lawmakers’ ambivalence about international trade. The Bush administration is hoping to push a spate of free trade deals through Congress this year, but the road now appears unfettered for just one.”