For the past three decades, America has imported more foreign goods than it exported. 2007 will be no exception and the U.S. is on pace to post a trade deficit of more than $700 billion.
Agriculture, historically, has been the lone bright spot in the overall U.S. trade picture. While a weaker dollar makes U.S. goods cheaper overseas, some economists believe the string of more than 40 consecutive agricultural trade surpluses could be in jeopardy.
Though there is little optimism for a breakthrough anytime soon in the current round of World Trade Organization talks, The Bush administration continues to push its trade agenda. So when the European Union announced this week it would CONSIDER a reduction in farm subsidies the rest of the world took notice.
In what appears to be another step forward in negotiating a world trade agreement, the European Union announced this week it was reviewing its agricultural trade policy. Included in EU Agricultural Commissioner Marion Fisher Boel's "health-check review" are:
- assessing the EU agricultural safety-net
- evaluating a reduction in support for farmers receiving large subsidy payments
-considering an increase in the base amount of acres a farmer must own before receiving subsidy payments.
Currently, EU agricultural policy devotes 40 percent of its entire budget to farm subsidies. Any reforms initiated by Fischer Boel would not take effect until sometime late in 2008.
The work comes on the heels of a recent meeting in Geneva. Brazil, China, India and other developing nations are urging more prosperous nations to make greater efforts to reach a new global trade deal.
World Trade Organization President Pascal Lamy (Lah-me) continues to remain optimistic a deal can be negotiated in 2008. But Lamy's optimism is not echoed by everyone. In the background, there are rumblings an agreement will not be achieved until after the U.S. Presidential election next year.
Work on what is referred to as the Doha round of trade negotiations has been in progress since 2001. The ongoing effort has suffered several ups and downs over the past six years. Just when the trade deals are declared dead another negotiating session is held. The next meeting may occur during the World Economic Forum in Davos, Switzerland. In the past, this has been a place trade negotiators have worked on the sidelines to hammer out policy details. It remains to be seen if this will happen again when business leaders and politicians meet in January.