The WTO panel found that USDA export credit guarantee programs amount to export subsidies. The panel also reportedly ruled that marketing loans and perhaps even direct payments under the 2002 farm law are trade distorting.
The ruling places U.S. cotton interests in the same leaky trade barge as U.S. cattle producers. In the wake of recent Mad Cow scares, the cattle industry is waging simultaneous battles to reopen the Japanese market to American beef, while keeping Canadian live cattle from crossing the border. Indeed, even as the USDA was setting up a working group on trade differences with Japan, U.S. cattle producers were winning a temporary injunction preventing imports of Canadian ground beef.
Where this all ends is anybody's guess, but one thing seems certain: The Bush administration is determined to protect the lucrative farm export market, even as it launches programs to track the movement of U.S.-bred cattle.
Ann Veneman, Secretary of Agriculture: "The importance of American agriculture simply cannot be overstated. Exports solidly underpin farm income and support almost 900 thousand jobs of which 40 percent are in rural areas."
USDA Secretary Ann Veneman reported a bright future for U.S. farm exports, which are expected to hit $59 billion this year. The Secretary said China had moved up the list of farm trade partners to capture the number five position, with expected sales to reach almost $5.5 billion.
Trade Representative Robert Zoellick was able to report progress in trade negotiations with several countries, including Australia, China, and the European Union.
Ambassador Robert Zoellick, United States Trade Representative: "The key point here is to stress what we have always emphasized, which is, unlike some countries, the United States has been willing to negotiate its subsidies and willing to negotiate its tariffs."
Export numbers are rising despite the loss of revenue from U.S. beef exports due to the single case of BSE, or Mad Cow, discovered in December.
When the single case of U.S. Mad Cow was discovered, only 28 of 80 animals from the originating Canadian herd were located. To protect the health of US citizens, and prevent the same spotty results in the future, the USDA is moving to the next phase of implementation of a National Animal Identification System. The ultimate goal of the program is to create a national database that will allow USDA officials to trace the origin of a diseased animal in no more than 48 hours.
Several companies are manufacturing various devices to assist in creation of that database. They include everything from ear tags to retinal scanners. Cost estimates for data collection range from 25 to 90 cents per animal.
The program is scheduled to begin this summer with voluntary participation. USDA officials are not discussing any plans to make the program mandatory.