- The Washington Times - Wednesday, July 5, 2006

As trade negotiators convened in Geneva over the weekend under the auspices of the World Trade Organization, they knew that the de facto deadline for completing the Doha round of trade liberalization was rapidly approaching. Unfortunately, the meeting ended abruptly amid mutual recriminations among the European Union, America and developing nations. No substantive progress was achieved.

The Doha round, launched in November 2001, is the first comprehensive trade-liberalization round overseen by the WTO, which was created in 1995 by the eight-year-long Uruguay round. Doha will not have the luxury of meandering that long because President Bush’s trade-promotion authority (TPA) expires on June 30, 2007. TPA, which precludes Congress from amending a trade agreement and therefore provides indispensable incentives for other countries to negotiate with the United States, almost certainly will not be renewed any time soon.

The Doha round has been showcased as the “development round” because one of its primary goals was the reduction of agricultural tariffs and subsidies in rich nations in order to increase the ability of poor, developing countries to export their farm output. By restricting agricultural imports and subsidizing agricultural output, wealthy countries, including Japan and America, and the European Union shower their farmers with nearly $300 billion a year in support. That policy raises the price of food for all consumers, including poor families.

Another Doha goal included reducing developing countries’ tariffs on industrial goods. A third goal was to significantly liberalize trade in services, where the United States enjoys large comparative advantages. In fact, the services sector in America is more than 30 times larger than the farming sector, making it all the more galling that the welfare demands of U.S. farmers are jeopardizing the benefits from the Doha round. Moreover, as World Bank President Paul Wolfowitz recently observed, “80 percent of U.S. farm subsidies go to only 20 percent of recipients, often large enterprises.”

We stipulate that the import tariffs of the European Union and Japan are a greater impediment to agricultural trade than U.S. farm subsidies, which totaled about $19.5 billion last year. However, Oxfam and Mr. Wolfowitz have estimated that the U.S. trade proposal would establish a ceiling of $22.6 billion for farm subsidies. That’s progress? It is worth recalling that 10 years ago a Republican Congress passed and President Clinton signed the Freedom to Farm Act, which, had it not been circumvented and then effectively repealed, would have eliminated farm subsidies by 2003. In the interest of its taxpayers and food consumers, Washington should make a more accommodating proposal on U.S. farm subsidies.

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