Iowa Public Television


New Farm Law at Heart of Growing Trade Fuss

posted on May 24, 2002

After affirming a new age of Russian-American friendship, the President and Mrs. Bush spent the weekend with the Putins. Earlier the leaders sealed a new arms reduction agreement. This is not to say that there are not issues that continue to divide the two nations.

One of the lingering concerns involves chicken. Apparently, the Russian embargo on American chicken continues. The poultry embargo was imposed because of what the Russians called lax U.S. sanitation standards. The embargo not incidentally came at about the same time the U.S. was slapping import quotas on steel made in Russia and elsewhere. The constricted access to the Russian market has backed up U.S. poultry inventories and dampened red meat demand and market prices.

Trade is obviously a big deal and many of the nation's trading partners this week reminded the president that for all its talk about free markets the U.S. is a bit cavalier in its trade practices.


New Farm Law at Heart of Growing Trade Fuss

President Bush stepped off Air Force One this week straight into the teeth of a burgeoning trade war with Europe and other major U.S. trading partners. At the heart of the dispute is the new U.S. farm law, which boosts price supports by 67 percent.

European Trade Commissioner Pascal Lamy said the new farm law was "not good news for developing countries … and world agricultural prices."

Coming on top of new U.S. duties on foreign steel and Canadian lumber, the farm bill is seen by many foreign leaders as further evidence of a shift toward a more protectionist trade policy in the States.

That view, say Bush administration officials, is nonsense. U.S. Trade Representative Robert Zoellick says the U.S. no longer will play "Uncle Sap" in a world awash in subsidies. He also noted new U.S. farm subsidies are within WTO limits and remain below support levels in Europe and Japan.

The Europeans counter by saying it's not so much the size of the subsidies under the new law but the kind of subsidies employed. They allege the return of higher target prices for major U.S. crops will encourage overproduction.

Currently, it's unclear where the trade rancor will lead. But the foreign response to U.S.-imposed steel quotas is generally typical. Russia, for instance, threw the American livestock market into disarray when it banned U.S. poultry imports in March in response to the new steel policy. The ban was lifted a month later, but technical and bureaucratic delays have slowed poultry exports to Russia to a trickle.


Tags: agriculture Congress news policy politics trade