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Source: U.S. Wheat Associates news release

U.S. Wheat Associates (USW) thanks U.S. Trade Representative Robert Lighthizer for his efforts to defend U.S. agriculture against attempts to weaken the World Trade Organization (WTO) rules on domestic support in agriculture. The Buenos Aires Ministerial would be a failure if the trade liberalizing mission of the WTO were to take a massive step backwards through a permanent exemption for market price supports for certain major agriculture producers.

India and other countries have attempted to create a permanent loophole for certain types of price support programs associated with state-run stockpiling programs. These types of price supports can be highly trade distorting, violating both WTO rules and the spirit of trade liberalization that the organization is meant to embody.

Worse, by holding the entire trade negotiating system hostage to demands to weaken commitments on agriculture, these countries are undermining the WTO and exacerbating the institutional challenges it faces.

Domestic support negotiations are a non-starter for U.S. agriculture without market access liberalization. For example, India's bound tariff rate on wheat is 100 percent, giving it more than enough policy space to restrict all wheat imports. U.S. tariffs are much lower in virtually all products.

To be clear, USW does not object to holding public stocks for food security, which is critical for all countries. Public stockholding has always been included in the Agreement on Agriculture's "Green Box" of non-trade distorting support, but with the recognition that administered prices (i.e. price supports) should be properly notified considering their potential to distort trade. There is no such restriction on purchases for public stocks using market prices.

U.S. farmers are firmly committed to open markets and continuing productive negotiations at the WTO and other forums to improve the global trading system.

Giving in to misguided attempts to weaken the system while holding hostage all other negotiations is a recipe for failure far greater than the lack of a ministerial declaration in Buenos Aires. U.S. agriculture needs a strong, vibrant WTO, but WTO rules needs to be strengthened, not weakened. If the only outcome in agriculture at the Buenos Aires ministerial were to be the creation of a massive, permanent loophole for the most trade distorting programs, the ministerial would be a failure.

Last week, U.S. Wheat Associates and 13 other agriculture organizations sent a letter to USTR in advance of the ministerial. The press release on that letter can be found here.

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