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Exports, Tariffs & the WTO

posted on December 23, 2005


Congress did manage to deliver President Bush a couple of presents prior to adjourning for the holidays. One of the most contentious pieces of legislation was a $450 billion defense spending bill. At one time, the measure included provisions for oil exploration in the Artic National Wildlife Refuge, and disaster relief for farmers hurt by this year's drought and floods. But those items were eliminated as lawmakers tacked on billions of dollars in relief for the hurricane-damaged Gulf Coast, and funds to battle a potential bird flu outbreak. So it goes in the give-and-take world of American politics. Meanwhile negotiators of a different sort wrapped up their summit in Hong Kong this week. Like Congress, the 149 members of the World Trade Organization failed to come to terms on the thorniest issues. Still, WTO members did make modest progress in their efforts to liberalize global trade.

Exports, Tariffs & the WTO

For agriculture, the most important accomplishment in last week's World Trade Organization talks in Hong Kong was to pin down a commitment for wealthy countries to end export subsidies by the year 2013.

The talks failed to get the EU to further reduce its agricultural import tariffs, which Brussels has said it would cut by an average of 46%.

The U.S. made a small concession to West Africa cotton producers by agreeing to eliminate export subsidies to American farmers by 2006. However, the U.S. was able to avoid discussion of a far bigger issue of further cuts to its domestic farm subsidy program.

By the close of talks, developing nations felt the final agreement addressed many of their concerns: from opening up rich nations' farming markets to measures that could enable the world's poorest countries to increase their tiny share in global trade.

In his concluding statements, WTO chief Pascal Lamy, and others agreed, the Hong Kong meeting produced more for the developing countries rather than achieving the traditional WTO goal of easing trade for all 149 member countries.

Iowa senator Charles Grassley, who chairs the Senate Finance Committee that has legislative and oversight jurisdiction over international trade -- says a lot more work needs to be done in the trade talks before Congress can be convinced to approve any final agreement.

The WTO hopes to conclude a binding global trade treaty by the end of next year. The next set of WTO talks are slated for April 30, 2006 -- to continue to work out formulas for cutting farm and industrial tariffs and subsidies. These are the nuts and bolts of an eventual trade pact.

 


Tags: agriculture news trade