American wheat farmers took another hit in the pocketbook late in the week on the news the European Union had granted a 5 euro per ton subsidy refund to exporters who sold 234-thousand metric tons of EU wheat. The export subsidy was the first in this year's marketing season, which began last July.
Some analysts believe the subsidized sale is as much an EU comment on American farm and trade policy as it is an effort to move a little European grain.
The Europeans aren't the only trading partners who are complaining … about the recent U.S. establishment of steel quotas, or for that matter the new farm bill.
Even before President Bush put his signature on the 2002 farm law, U.S. trading partners were decrying what they called its protectionist tenor.
The Europeans, Canadians and Brazilians have attacked the bill, saying it contradicts U.S. calls for freer farm trade. And in talks in Paris this week, the Cairns Group of farming nations expressed outrage over the 67 percent increase in subsidies set out in the new law.
Though no one has yet challenged the farm bill before the World Trade Organization, the word from overseas is clear: The U.S. will have a lot of work to do to convince trading partners it remains committed to rolling back production and trade-distorting subsidies.
In response, the U.S. strongly denied the farm bill would impede trade. The U.S. Trade Representative's office said the bill not only set subsidies within WTO limits, but also left open foreign access to U.S. markets.
President Bush: ‘This farm bill supports our commitment to open trade and complies with our obligation to the World Trade Organization."
Citing U.S. agriculture's dependence on exports, the Bush administration used the 12-minute farm bill signing ceremony to campaign for greater trade authority for the president.
The White House is pressuring the Senate to approve Trade Promotion Authority, or TPA, which would give the president a freer hand in negotiating trade agreements with other nations. Also known as fast-track authority, the administration says TPA is essential to improving the U.S. farm economy.
President Bush: "And because I believe the best way to help our farmers and ranchers is trade, I need Trade Promotion Authority, particularly from the Senate. The House has passed it. I need it from the Senate … soon."
The president wants trade promotion authority to expand the North American Free Trade Agreement, or NAFTA, to 31 additional countries in the Western Hemisphere by January 2005. The White House also wants to complete a new round of world trade talks by that time.
Ann Veneman, Secretary of Agriculture: "One of the real benchmarks of the president's agriculture policy is his trade policy and that is to negotiate new trade agreements so we have markets for our products all around the globe."