By Dalton Henry, USW Director of Policy
While achieving progress in multilateral trade negotiations among World Trade Organization (WTO) members is often frustrating, USW sees some steps in the right direction in the recent agreement at the WTO Nairobi Ministerial meeting held in mid-December — despite some setbacks.
USW is particularly pleased to see the elimination of export subsidies, which rank high among the most trade-distorting forms of support. The agreement immediately eliminates such subsidies for developed countries and calls for a phase-out for developing countries. Though the world’s largest traditional user of agricultural export subsidies – the European Union – has moved away from the subsidies, agreeing to eliminate them is no small matter.
USW welcomes the recognition in Nairobi that the United States can keep offering food aid and development programs without change, which underpins this country’s leadership in the world. Wheat produced by U.S. farmers is a cornerstone grain for food aid that is affordable, nutritious and fits monetization projects that encourage in-country development.
The Nairobi agreement also addressed export credit and financing rules that reflect reforms the United States has already made. USW believes there should be no further restrictions on the GSM-102 program, which is a reliable, practical financial tool used by several U.S. wheat importing countries.
Despite these gains, USW is disappointed that the Ministerial reauthorized the use of transportation, marketing and processing subsidies for agricultural products for developing countries. This exception could provide cover to bad actors who have violated past agreements to the detriment of producers around the world. USW will continue working with the Office of the U.S. Trade Representative (USTR) to ensure developing country members do not abuse this exception.
The Ministerial reflected differing views on future WTO negotiation priorities. At least the agreement recognizes that work would continue on Doha’s remaining issues in agricultural trade. This includes public stockholding programs, which India uses to subsidize its farmers, and a “special safeguard mechanism,” which would allow countries to “snap-back” tariffs on products in the face of rising imports. The continuation of these negotiations is especially concerning given some countries’ insistence on using these negotiations to roll back progress at the WTO.
USW congratulates and thanks our negotiators at USTR for their hard work. We look forward to sharing the U.S. wheat farmer’s voice in future negotiations. We must also ensure that WTO members hold firm on past agreements, allow no more backpedaling on domestic subsidies and return their focus to the original goal: liberalizing trade policies to promote economic growth for all participants.